What’s evident from recent big sales of contemporary art is that booming equity markets and low interest rates are driving collectors to spend, and they seem to be most interested in works by younger and more diverse artists.
In London earlier this month, nine of the 10 top-performing artworks—that is, pieces that surged past their estimate ranges by the largest amounts—were by artists younger than 45, the London art market analysis firm ArtTactic found in analyzing the results of evening post-war and contemporary art sales at Sotheby’s, Christie’s, and Phillips.
And out of 13 auction records achieved by artists at the evening auctions last week, nine were from this “young, on-the-rise” group, ArtTactic said in its analysis.
Among them was Flora Yukhnovich, a London-based painter born in 1990, whose I’ll Have What She’s Having, 2020, realized £1.85 million (US$2.54 million), a record auction price (without fees) for the artist, according to ArtTactic. The result was multiples of the pre-sale estimate range between £60,000 and £80,000.
This group of artists were a “crucial component” to the sales, accounting for 23% of total value, up from 12% last year, the firm said. Their importance was most evident at Phillips—which has a focus on contemporary art and design—with 30% of the total sales value generated by younger artists at their evening sale on Oct. 15, ArtTactic said.
“There is still a lot of energy and interest around that sector of the market—emerging artists and artists of color whose work is driven by identity and personal narrative,” says Drew Watson, art services specialist at Bank of America Private Bank.
Overall, the art market has been supported by a consistent bull run in stock markets, providing more discretionary income, for those wealthy enough to own stocks, to spend on art. Low interest rates help, too, as investors aren’t distracted by income-producing securities, and art, which doesn’t provide an income stream, has the potential to appreciate, Watson says.
Total sales of at £130 million (US$179 million) at the three evening contemporary auctions in London were 7.5% higher than results in 2019—pre-pandemic—and up 27% from a year ago, according to ArtTactic.
The London auctions were the same week as Frieze London and Frieze Masters, which reported “swift sales and major placements,” with many participating galleries, including Stephen Friedman and Gagosian, reporting they had sold out their booths.
While many of these sales were of works by artists older than 45, works by women and artists of color seemed to dominate interest.
Stephen Friedman sold Austin -based artist Deborah Roberts ’ figurative collages that the gallery says “depict the complexity of black subjecthood and explore themes of race, identity, and gender politics,” for prices ranging from US$125,000 to US$150,000. Gagosian, meanwhile, sold Los Angeles-based painter Jennifer Guidi’s series of nine paintings and nine works on paper titled Infinite Waves, which were inspired by the time Guidi spent outdoors, in nature, during the pandemic.
Among the biggest ticket sales reported by galleries was a “major painting” by Kerry James Marshall that David Zwirner gallery sold to an American collection for US$2.2 million, and a fabric sculpture by Louise Bourgeois that Hauser & Wirth sold for US$2.4 million.
Meanwhile, Pace Gallery sold a work by 38-year-old New York-based painter Loie Hollowell for US$175,000 and David Kordansky Gallery also sold all seven paintings by the Los Angeles-based artist Lucy Bull, born in 1990, for prices between US$25,000-US$85,000.
While many emerging artists are producing great work, Joe Sheftel, an art consultant and private dealer in New York, sees some of the demand being driven by the arbitrage collectors can create when buying works by young artists at relatively low prices and selling them into a constantly rising market.
“With the way the stock market is going, and wealth disparity is functioning, a lot of people have US$10,000 to experiment with or try on a younger artist,” Sheftel says.
Such dynamics, as well as prices skyrocketing above reasonable estimates at auctions, are making it difficult for some long-time collectors, he adds.
Sheftel works with one collector, for instance, who bought works of emerging artists for decades in an approach that usually involved getting to know and support these artists and their galleries over time. Galleries often favor these kinds of collectors over those who might want to just buy and flip a painting for profit.
But today, “the demand is so high that the things that used to be meaningful for obtaining work or obtaining access, don’t carry the same weight,” Sheftel says.
Demand for emerging artists and artists from more diverse backgrounds accelerated during the period of the pandemic from the dual factors of rapid wealth creation at the high end—thanks to the ever-rising stock market—and an influential social movement, driven by the racial and social justice protests sparked in the spring of 2020 in the U.S., Watson says.
“We’re still seeing that play out in the market,” he adds, although he sees collectors becoming more discerning with so much inventory on the market now.
“What we are advising our clients is to be judicious because there are some really important artists and important works that are trading now, but there are those that may not have staying power,” he says.
Some of these market dynamics could change in the months ahead with a flood of blue chip art coming to market in a few big sales. Many consignors had held off selling prized works during the pandemic, so their appearance now could spark strong interest from pent-up demand.
The sales include Sotheby’s auction of 11 works by Pablo Picasso being sold by MGM Resorts on Saturday. Also, during the marquee November auctions in New York, Sotheby’s will offer the first part of its sale of the US$600 million Macklowe collection, with powerhouse pieces by Mark Rothko, Cy Twombly, and Andy Warhol, among many others.
At its marquee November New York sales, Christie’s will auction the US$200 million impressionist collection of Edwin Cox, featuring works by Vincent van Gogh, Paul Cezanne, and Gustave Caillebotte, among other high-profile works by Jean-Michel Basquiat, Warhol, Picasso, and Ed Ruscha.
The flood of supply will mean sellers have less negotiation leverage with the auction houses over commission structures, but it also means the return of high-end sales, Watson says. While the market has been robust recently—with sales-to-date outpacing full year 2019 results already—few paintings have produced eight-figure headline sales. That should change, he adds.
But Watson expects a newer generation of collectors to continue to be interested in young, diverse artists, and he expects collectibles and street art to continue to do well. For anyone questioning the latter, consider Sotheby’s Oct. 14 London sale of Banksy’s Love is in the Bin for US$25 million, the biggest ticket realized during the London auctions. The estimate range was between US$5.5 million and US$8.2 million.