Latest trends on the art market

[12/12/2002]

 

After several months of near-constant decline, the stock markets are now beginning to recover. And the wave of optimism has fed through to the art market. October’s prices were not far off last October’s. The third-quarter collapse now looks more like a warning shot, reminding investors of the tensions that can rock the art market at times of economic and geopolitical uncertainties.

In such conditions, no two sales are alike. Some auctions set price records while others have record buy-ins. It is hard to gauge the temper of the market on the strength of the prestigious New York sales alone But looking at all 1,100 or so fine art sales that took place in October, a few points become clear.

Buy-in ratios are rocketing: averaging 36.8% in October. This is an across-the-board phenomenon. Even the biggest-name auction houses had unpleasant surprises: Christie’s, Sotheby’s, Phillips, Tajan, Finarte, Dorotheum and other prestigious houses all suffered from extreme buyer selectivity in October. At many sales, in France, Germany, Austria, Italy, Israel and South America, the buy-in ratio was over 50%. But not all. At a lengthy sale (522 lots) of a mixed bag of artworks, Belgian auction house De Vuyst on 5 October, less than 1% were bought in. The London art market is also buoyant: 70% of lots put up for auction are finding buyers.
Another marked trend in October 2002 was the decline in transaction volumes — down 27% on October 2001 and down 38% on October 2000. Like the rise in buy-ins, this reflects the extreme caution art collectors are displaying. Sellers fear they will fail to fund a buyer at the reserve price while buyers are scared of paying too much for the objects of their desire. A dearth of quality lots that kept prices in October at exactly the same level as in 2001.

One last trend apparent in October: the US lost ground to the UK, France, Belgium and Hong Kong, which this year, as every year at the end of October, held a series of attractive auctions.