A Volatile Market Sobers Up

The Contemporary art market has a newfound sobriety. It may be a spurious sobriety, where estimates remain high but fewer works soar above them, but it is a temperance nonetheless. And this may be a good thing for a market that has been climbing a wall of worry these last few months.Even so, last week’s London auctions showed many indications of continuing growth. Phillips de Pury’s London sale brought in $55 million. That’s more than a ten-fold increase over the auction house’s $10 million February sale in 2007. Sotheby’s, too, had a record-setting sale of $189 million, a figure, the house is quick to point out, that is the highest value ever achieved in a Contemporary art sale in Europe.Sotheby’s pulled in record prices for both Lucio Fontana, a favorite artist among Europeans, and Gerhard Richter. It also had strong sales for Francis Bacon, Andy Warhol, and Joan Mitchell. Phillips claimed the record price — $3.5 million — for a Damien Hirst spot painting; perhaps the gargantuan 7-by-17-foot canvas won out by sheer volume. There were also strong prices for Jeff Koons, Cecily Brown, Anselm Reyle, and Ugo Rondinone, among others.So with such strong prices, sales volume, and deep bidding, why the worry?At a panel discussion held recently at the Museum of Modern Art, dealer Andrea Rosen held up the case of one artist as an example. “Look at what happened to poor Rudy Stingel,” Ms. Rosen said.Here’s what happened to Mr. Stingel: After a two-year run of increasingly higher prices, three of his works failed to sell during Christie’s London sale earlier in February. To explain the surprising result, representatives of Christie’s suggested that Mr. Stingel might not have a deep enough secondary market to warrant auction sales — which is exactly the risk Ms. Rosen was referring to. What artists and dealers fear most is being left out when the art market’s game of musical chairs ends. That’s why dealers are so eager to control their artists’ markets and shudder when they are governed by the vagaries of the open market.Indeed, the dislocation caused by the Stingel sale sent a jolt of worry through the auction world, not because of the financial ramifications but because Christie’s had placed the Stingels at the beginning of the sale, as lots number 2, 3, and 14. The houses like to stack the first few lots with pictures they are confident will exceed high estimates and excite the crowd. When the Stingels were brought in, Christie’s market judgment was put to the test. The sale eventually recovered and, with some big performances by select pictures, made $143 million. That’s a strong number for a sale in which only 69% of the lots found buyers.In the brief intermission between the Christie’s sale early in the month and the corresponding Contemporary sales at Phillips and Sotheby’s last week, it appeared as though the oft-forecast crash in Contemporary art prices had finally begun. Or, at least, the Christie’s sale showed there was the potential for real weakness in the secondary market.And in the same few weeks, the press has been full of reports of a significant slowing in the primary market.But Stingel survived, as demonstrated last week at Phillips de Pury, the upstart auction house that specializes in making markets out of artists developing reputations. Phillips has done more to establish Stingel prices and records on the secondary market than any other house. And it showed its expertise last week. All three of its Stingels sold, and all sold within the range of their estimates, two near the low end of the estimates at around $900,000 and one toward the top at more than $600,000. Two of those sales were strong enough to rank among Mr. Stingel’s top five prices, though nowhere near the record of nearly $2 million set by Phillips in November.The art market, then, is somewhat overshadowed by its own expectations game. As estimates race to catch up with certain artists and their runaway prices, what would normally qualify as strong sales begin to look like signs of fragility. Perhaps the greatest value of the London sales, then, will be to have doused the market with a little cold water rather than having frozen it out entirely.

A Volatile Market Sobers Up

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