The art industry has always experienced a degree of volatility. From 2007 to 2009, the market fell a staggering 40% and made a miraculous recovery after the 2008 financial crisis, climbing back to pre-recession levels within the next decade. Now the art world is again facing significant challenges due to the pandemic. Confidence in the art market post-lockdown has been shaky and there’s no doubt that, like so many others, the art industry has had to adapt to survive.
Total art market trade dropped by around 25% in 2020 at the pandemic’s start. The Artnet Intelligence Report reveals that impressionist and modern art have been the hardest hit, with sales of works above $10 million dropping by more than 40%.
Encouragingly, the market is showing signs of buoyancy and recent big-ticket art sales have been cause for optimism. In the first quarter of 2021, Christie’s, Sotheby’s and Phillips showed a 50% increase in global auction sales, racking up totals of $1.26 billion. This represents an increase of 22.4% since 2017 and a definite uptick from the $835.5 million sales figure recorded this time last year.
According to art investor Olyvia Kwok, two recent high-end art sales, in particular, are markers of growing art market optimism despite pandemic setbacks. The first is a Picasso portrait that sold for $103m —almost double the estimated $55m price tag— and a Basquiat work that fetched $93.1m, again exceeding predictions of a $50m final sale.
Picasso portrait steals the show at Christie’s
Christie’s 20th Century Art Auction on May 11th in New York hosted a 20-minute bidding feud between two investors who steadily raised the price to $102.4m —nearly twice the predicted estimate. The bidding began at $45m and was eventually stopped at $90m, with fees and taxes added. The famous portrait of Marie-Thérèse Walter painted by Pablo Picasso is titled Femme assise près d’une fenêtre (Marie-Thérèse) and was created in 1932. It shows a fractured, curvilinear painting of who was Picasso’s muse and lover from 1927 to 1935.
Picasso has long been considered one of the most significant artists of the 20th century, and part of what makes this work exceptional is that it was painted during Picasso’s so-called “years of wonder,” when the artists painted more than 100 artworks. Many of these featured Marie-Thérèse lying down, naked, with her eyes closed while lost in her own thoughts, however in this case, she appears sitting on a black chair near a window and with her eyes open. The painting was easily the star of Christie’s 20th-century evening auction and attracted much interest from art experts around the world.
The portrait was sold with a third-party guarantee, which partly explains its extravagant final sale price, well beyond any Picasso brought to market in 2020. According to Kwok, “third-party guarantees were definitely a winning tool to bring supply to the bidding rooms at low risk for the auction house.”
Auction guarantee levels are 44% higher than 2016 levels, although they remain 35%, below the 2018 peak of the market. Art guarantee analysis focuses on Post-War & Contemporary Art Evening sales that took place in London, Hong Kong, and New York. Recent investigations reveal that a total of 1,270 guaranteed lots with an estimated value of $4.87 billion occurred from 2016 to 2020. This is evidence of the significance of auction guarantees in a post-pandemic market, particularly in the Post-War and Contemporary categories.
The Marie-Thérèse portrait is not the only one of Picasso’s works to have garnered attention during 2021. Earlier this year, 16 lots fetched over $10 million each, Picasso being the most common within this price threshold with three paintings bought in London in late March. An additional two Picasso paintings found their way onto the top 10 Fine Art auction results after being sold in London by Christie’s: Femme nue couchée au collier (1932) and Femme assise dans un fauteuil noir (1962).
Basquiat sold for $93.1m at Christie’s
Another blockbuster sale was a painting by Jean-Michel Basquiat titled In This Case (1983), which sold for $93.1 million at the inaugural 21st Century Evening Sale at Christie’s New York on 11 May 2021. Like the Picasso, this piece was estimated to sell for at least $50m. The bidding started at $40m and within a mere 6 minutes battle between six bidders, the final price of the artwork was set at $81m, with taxes and auction fees bringing it to its final price.
The vibrant painting of a skull is almost 2 metres in height and is now the artist’s second-highest recorded sale value. His record selling piece —also one of the most expensive paintings ever purchased—, Untitled (1982), is another skull painting sold in 2017 to Japanese billionaire Yusaka Maezawa for $110.5m, the highest price ever paid at auction for a work by an American artist.
At the height of his fame in the 1980s, Basquiat was an art market success, earning $1.4m a year from his works which consistently appeared in auction houses. Sotheby’s had already publicly sold In This Case once before in 2002, for a little less than $1m, but the piece was also sold privately in 2007 for an unknown amount. In 2020, Basquiat’s Boy and Dog in a Johnnypump (1982) sold for more than $100m to Ken Griffin, founder of Citadel.
During the pandemic, many top-end artworks have been offered via virtual online auctions. With regards to the success of Phillips’ online auction held in October 2020, art investor Olivia Kwok stated that “consumer market confidence started to come back after the summer.”
Now, with the many record-breaking sales occurring in 2021, the market is showing signs of thriving despite economic uncertainties. “You can see that as demand increases again on the high-end, playing with the equilibrium between volume and value seems to be the auction houses’ main bet for a rebound of the art market.”, Olivia says.
Kwok believes that the art industry will always find novel ways to overcome challenges and evolve. “The art market is like the stock market. It’s had a steady growth in the last 2-3 years, but now it’s reacting to all the recent uncertainties, i.e. COVID, Brexit, the US elections.” And adds: “Overall, the market is fine; it has had a little pause, but the market will act accordingly.”
Many are anticipating that art market confidence will continue to grow in the coming months, with Kwok saying of the 2021 industry, “I do believe we will see more excitement from the top ends.”