Fine art prices are falling as buyers become scarce

It’s been prophesied for years, and now it’s finally come to pass: Auction prices for fine art are falling.

“It’s been coming for a while,” says the art adviser Jacob King, who bought a painting by Sturtevant at Christie’s on Wednesday evening for $882,000. “Art has gotten so expensive, across the board. And when you’re talking about works that are $2 million, $5 million, $10 million, there’s just not that many buyers out there. Once someone has their de Kooning, they don’t necessarily want to buy another.”

This spring’s marquee auctions in New York have delivered a string of middling—and occasionally disappointing—results for artwork in a range of mediums, sizes and periods.

The slowdown comes after many seasons in which collectors, advisers and dealers wrung their hands over the potential for macroeconomic conditions to affect art prices, followed quickly by some variation of “but they didn’t!” once totals were triumphantly tallied.

The reset this year has been a welcome change for some on the buy-side. “This new situation is much more fun,” says the dealer Jeffrey Deitch, who could be seen bidding at auctions throughout the week. “A real auction where you might be able to get a bargain? That’s a dynamic market.” Deitch purchased a Jeff Koons sculpture at Christie’s for just under $2 million, well under its estimate of $3 million to $5 million.

The good news

To be clear, this week was not a wipeout: Auction houses have collectively sold more than $1.7 billion worth of art in just a few days—no small feat but below last year’s total of $2.5 billion. (Christie’s: $922 million; Phillips: $108 million; Sotheby’s: $716 million and counting.) And they did their best to keep expectations modest from the start, with only a handful of $40 million-plus lots being offered.

“We were very pleased with the week,” says Charles Stewart, Sotheby’s chief executive officer. “We had very large totals by any historical standard, sell-through rates were quite high and a lot of money was spent.” Buyers, he continues, “were incredibly impressive and very global.”

Dozens of artists’ records were set, including those of Barkley L. Hendricks, whose full-length portrait of artist Stanley Whitney sold for $6.1 million at Christie’s (with fees), and Louise Bourgeois, whose large Spider sculpture sold for $32.8 million at Sotheby’s on Thursday evening. Buyers from around the world showed a willingness to spend whatever was necessary to buy the very best, or very rarest, examples of an artist or period: An ultra-rare painting by Henri Rousseau sold at Christie’s for $43.5 million with fees, well above its high estimate of $30 million.

“Like other sectors of the economy, it’s not even,” Deitch says. “There are sectors of the art market that are booming: You saw tremendous enthusiasm for work by Nicole Eisenman, Henry Taylor, Kerry James Marshall and some younger artists.” His takeaway, he says, is that “you are feeling the effects of the larger economic environment, but the art market is still quite solid.”

Collectors were also happy to bid aggressively for artists whose markets, at least in theory, have growth potential: At Phillips, a painting by the late painter Noah Davis took a lengthy 12 minutes to sell as bidders steadily pushed the price past its high estimate of $150,000; with auction house premiums, its final price was $990,600. And at Sotheby’s, a painting by Justin Caguiat (born: 1989), which carried an estimate of $150,000 to $200,000, sold for $787,400.

The bad news

Not every painting is a masterpiece, and not every artist is a market darling.

There appeared to be an unusual number of 11th-hour lot withdrawals before auctions began, often a sign that no has indicated interest in an artwork, or that the people who are interested refuse to pay the minimum a consignor has requested. “The power of auctions is that you find where the market really is,” Stewart says. “If there’s a lot that’s withdrawn, it may well be that the seller is not interested to proceed if [offers are] not what they were expecting.” The upside, he continues, “is that the sell-through rates of what was in the sales were very high, which is important.”

On Tuesday evening, Sotheby’s combined modern evening sale and stand-alone sale of the late record producer Mo Ostin had an estimate of $375 million to $534 million. The works collectively hammered at $363 million, and auction house fees brought the total to $426.8 million. Similarly, at Christie’s, the stand-alone evening auction of the late real estate investor Gerald Fineberg’s collection carried a presale estimate of $163 million and ended with a disappointing hammer total of $124.7 million; premiums brought it to $153 million.

Notably, work from several former market stars failed to live up to expectations at both houses. Paintings by Christopher Wool, for instance, struggled to generate interest. At Christie’s Fineberg sale, one of Wool’s striking, colorful word paintings was estimated at $15 million to $20 million, and sold for just $10 million with premiums. At Sotheby’s on Thursday evening, an additional Wool word painting carried an irrevocable bid and was estimated to sell from $10 million to $15 million; after what appeared to be just one bid, it sold for $8.4 million.

“For some of the people who’ve come into the market over the past six years and seen prices just go up, it’s going to be shocking,” King says. “Works they thought were from iconic, blue-chip artists are selling for half of what they would a couple of years ago.”

Similarly, many works by Willem de Kooning stumbled. There were two at Sotheby’s Mo Ostin sale: One sold for $5.8 million, just above its low estimate of $5 million, and the second, which was estimated from $1.5 million to $2 million, failed to find a buyer. Another that same night at Sotheby’s was estimated from $3.5 million to $4.5 million and sold for $3.3 million. Then there were three at Christie’s Fineberg sale: The first was estimated from $6 million to $8 million and sold for $3.6 million; the second was estimated from $8 million to $12 million and sold for $5.3 million; and the third was estimated from $3 million to $5 million and sold for $1.9 million.

“It’s hard to generalize,” Deitch says. “When you have a B-minus de Kooning that doesn’t get a good price, it’s important—if you’re going to make this kind of analysis—to look at what an A-plus de Kooning is going for.” Indeed, Christie’s also sold a de Kooning from the estate of S.I. Newhouse estimated “in excess of” $25 million, for $30.9 million. “In this market there’s competition for superb rare work,” Deitch says, “and ones that are just sort of mediocre are not getting the prices that you would have seen in 2017.”

The Top 10 lots

Here are the most expensive works sold this week. A year ago, the top 10 lots brought in just under $760 million. This year, that number sank precipitously to just $403 million, nearly a 47% year-over-year decline.