As the gavel came down on the fall art auction season, pieces by Impressionists like Monet, Modigliani and van Gogh fetched record prices—no surprise to many in this rarefied world. Rather, it was the sale of contemporary paintings by Andy Warhol, Cy Twombly and Francis Bacon that staggered the art market.
Not all that long ago, these artists' works were affordable to the merely wealthy. A case in point is Bacon's "Seated Figure," a painting from 1960 that last sold for $2.5 million at Christie's in 1996. Just 18 years later, the auction house sold it again, this time for an eye-opening $44.9 million.
Other record-smashing sale prices at Christie's included Andy Warhol's paintings of Elvis Presley and Marlon Brando, which brought in a combined $151.5 million; a canvas from Cy Twombly's Blackboard series that sold for $69.6 million (it had been valued at $35 million to $55 million); and Lucian Freud's "Julie and Martin," a painting from 2001 that took in $17 million.
Over at Sotheby's, the Impressionists and Post-Impressionist continued their record-breaking ways, but it was sculptor Giacometti's 1950 bronze "Chariot" that was the talk of the salesroom, tallying a solid $101 million. The sale actually produced a bit of disappointment, The New York Times noted. Experts had predicted it would surpass the $104.4 million paid for the artist's "Walking Man" bronze four years earlier. Still, were Giacometti alive today, there is no doubt he would be stupefied by the prices his works now fetch.
From an insurance standpoint, the breakneck speed of rising art values insists upon more frequent appraisals of the value of their holdings. At the same time, the narrowing gap between postwar and pre-war art prices requires more attention paid to diversifying these holdings from an investment standpoint—not that high-net-worth individuals acquire fine art for the same reasons they buy stocks, bonds or real estate. Many love the work and could care less about its fluctuating value.
The subject of the fine art market came up at a breakfast meeting I enjoyed in late-November with Le Conte Moore, managing director at DeWitt Stern, a Manhattan-based brokerage firm (now part of Risk Strategies Company) that serves a high-net-wealth clientele. "Count," as he is known in the industry, pointed out the folly in thinking every important artist from the postwar period is on the verge of fetching record prices.
"Many experts call contemporary art a new asset class, but some artists are hot, some less so," Count explained. "Artists like Warhol, Jeff Koons and Richard Prince are blazing hot. Other artists like Cindy Sherman are joining this class. If collectors have these artists' works, they must check the value of their holdings at least annually."
It's not that the Old Masters and Impressionists aren't still highly desired. "They're just not the kind of art that many affluent people want to hang on their walls these days," Count said. "Contemporary art is the new zeitgeist."
Like Checking the Stock Market
The new asset class also is on a tear, as the recent prices demonstrate. What was worth seven figures a few years ago may now be valued at eight figures. The problem is that many collectors have their art appraised every three to five years, a period of time considered standard.
