Why Buy at Auctions ?
Ideally, auctions at the well-known “auction houses” establish the fair market value of the items being auctioned, namely the highest price bid. Auction houses base their reputations on their ability to authenticate and estimate the value of the works they sell.
Auctions have traditionally been attended by experienced collectors and dealers. Sometimes collectors are accompanied by dealers who make sure the collector doesn’t over bid. Sotheby’s and Christie’s auction houses offer on-line advice to first time bidders: http://www.telegraph.co.uk/luxury/art/4282/how-to-buy-art-at-auction-by-christies-orlando-rock.html and http://www.sothebys.com/en/buysell/overview.html
A word of caution: Auctions are no place for unaccompanied amateur
First Half 2014 Auction Market Trends
Seeking a safe haven for their cash, a new generation of buyers from Russia, Asia and South America has renewed interest and spiked prices for impressionism art. A Monet painting of water lilies sold $54 million at a Sotheby’s June 23rd auction in London, “…confirming the global hunt is still on for trophy paintings,” said a Sotheby’s spokesperson. The auction prices, of 46 paintings of modern and impressionism artists, totaled $208 million, with works coming from several famous estates.
Interest in celebrity art is always difficult to assess. John Lennon’s original handwritten-manuscripts and drawings sold at a Sotheby’s auction in June for $2.9 million – double their estimated value.
The former Beatle penned the whimsy for two well received books, In His Own Write and A Spaniard in the Works, in the 1960’s. The items had been in his publisher’s collection since being written.
Boom Market for Auctions
Globally, high-end auction houses and high-tech auction websites shifted into gear in the second quarter of 2014. The art market in general has witnessed a resurgence with prices reaching and exceeding levels not seen since before the economic collapse of 2008. Christie’s generated $4.5 billion in Art sales in the first 6 months of 2014, up 12% increase from the same period of 2013. Sotheby’s Art sales rose 22% to $3.12 billion over the prior year, due in part to a 47% increase in its Asian sales which contributed $490 Million.
It is important to note most auctions take place in the second and fourth quarters of each year. Revenues and earnings follow suit.
New Customers & New Technology
Both Christie’s and Sotheby’s have been successful in connecting to the global market and new buyers through technology and new locations. At Christie’s, for example, new customers represented 24% of its buyers in the first half.
Sotheby’s, on the other hand, just announced a partnership with eBay to build upon the 17% of Sotheby’s first half bidders who used the internet. This partnership should benefit from Sotheby’s world class auction expertise and eBay’s technology solutions for seamless payment and unrivaled ability to reach collectors.
New Entries – Fine Art Market
Ebay reported a 13% rise in second quarter revenue which was negatively affected by a cyber attack, necessitating a global password reset for all users. Ebay’s entry into the Fine Arts market through Sotheby’s is expected to provide market-broadening synergies . Amazon has established its own fine art sales website currently in beta testing http://www.amazon.com/Art/b?ie=UTF8&node=6685269011. Of course many art galleries have been conducting virtual sales for at least a couple of years.
Currently, supply of top quality post-war art exceeds demand. The challenge for e-Bay and Amazon will be to expand demand for original art at the mid-quality level as well as for prints. Technology continues to expand the techniques for copying original artwork , now including the digital archival prints.
Old Rules, New Players
Perhaps the most important summary of the current auctions market trends recently came from Mark Cornell, Sotheby’s Managing Director for Europe:”The record successes we have enjoyed in London this summer are the fruit of the combination of old rules and new players. Old rules still apply: quality, rarity, provenance and correct estimates are key, and new players care just as much about those criteria as established collectors.”