Art Market Bubble?

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Submitted by mydogsarelazy on November 6, 2006 - 9:22pm

Hello Everyone,

If you follow the art market at all, you may be aware that prices for blue chip works of modern and contemporary art have gone through the roof.

Is the art market a "bubble?"

You might enjoy this brief article...

By the way, where can I find the info about how to post a hyperlink?


Submitted by jg on November 6, 2006 - 10:12pm.

JS, to add a hyperlink to a "reply," after you hit "reply," you'll be sent to a box for your reply. Just below and to the left of the box, you'll see "enable rich-text." Hit that, post your hyperlink, hit enter (to move to the next line), and you have your hyperlink.

To add a graph or jpeg, hit "add image" and follow the step-by-step directions.

Submitted by lostkitty on November 7, 2006 - 5:53am.


Sort of OT.

Are you into art? Do you know of any free places on-line to look up prices of individual pieces? I dont want to join artnet just to look up a few I have. I never pay for on-line research (sorry powayseller), unless I NEED to, I do not part with my money easily.

One in particular piece I bought before the artist died, and i am certain it has increased in value due to popularity of the artist. I am pretty certain i could not find any decent appraiser here in upstate NY and i do not have time to drive to NYC.

Submitted by mydogsarelazy on November 7, 2006 - 6:52am.

Hi Lostkitty,

Yes, I have a lot of connections to the art world...

Am an artist, art professor, art journalist.

I am afraid I don't know of any free online art price resources. Have you looked for records of anything sold on eBay?


Submitted by PD on November 7, 2006 - 8:02am.

I use Artprice. The last time I used it, you had to pay a dollar per artist. Then you had access to information about the kind of work (oil, watercolor), size, estimate, sale price (not always) and sometimes there is picture. You can put names on a list and they will email you when items are about to auctioned by that artist (this is free).

Mydogs, I have a French pastel from about 1885 that really seems to be in the the style of J.S. Sargent. I need to have someone look at it. Where should I take it? Thanks!

Submitted by privatebanker on November 7, 2006 - 8:29am.

Here's an article from Worth Magazine that discusses the Art Market.

"Annual sales of art amount to $10 billion in the United States alone, according to various industry estimates. In the past several years, consultants and economists have turned their sights to the problem of tracking this sector’s investment performance. Research by Jianping Mei and Michael Moses, professors at NYU’s Stern School of Business, and firms such as Art Market Research in New York, Kusin & Co. in Dallas and Gabrius in Milan, shows that art can complement equities, bonds and other more traditional investments because its price movements are not correlated with those of financial assets.

One thing is clear: fine art appreciates over time, and may outperform equities in some instances. The Mei/Moses All Art Annual Index tracks the auction prices of 6,000 pieces of art, including pre-1950 American paintings, Old Masters, 19th-century masters and Impressionists. Last year, the Mei/Moses index rose 21.7 percent. Equities fared better: the S&P 500 rose 28.7 percent. Longer term, the art index shines. The Mei/Moses benchmark had an annualized compound return of 12.6 percent over the past 50 years, beating the S&P 500’s 11.7 percent.

The gains are not only in aggregate measures, of course. Moses—himself a collector of what he terms “representational American painting” from the second half of the 20th century—notes that Boy with a Pipe outperformed the market, posting an average annual return of around 16.5 percent since Betsey and John Hay Whitney bought it in 1950 for $30,000. Alternatively, the two Edgar Degas racing scenes from the same lot returned 8 percent per year for their owners."

The art market has benefited from the latest surge in foreign investors mainly from Russia and India. They are paying outrageous prices and throwing caution to the wind. Low interest rates help to fuel the art market as well.

Submitted by mydogsarelazy on November 7, 2006 - 8:47am.

Some years ago the British rail Pension system invested in blue chip art with expert advice. I think that over time they more or less achieved the same return as they would have in the stock market.

Right now, collectors/dealers seem to be trying to out do each other in a game of who can get the most for a work of art. Steve Wynn would have held the title if he hadn't put his elbow through a Picasso, but now David Geffen has the title, having sold his Pollock for a reported $145 million.

I call that a bubble.

Regarding that possible Sargent, I would take it to a reputable auction house on their "free evaluation" day. They will do a good job for you, and unlike dealers they have nothing to gain by misleading you.

I think Bonhams and Butterfields has at least one evaluation day per month.


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