Billion-Dollar Question: Can Contemporary Art Keep Climbing?

by Eileen Kinsella

At Sotheby's Contemporary Sale, Dan Colen's "Holy Shit" (2006) sold for $341,000 and Andy Warhol's "Liz #1" (1963) sold for $20,325,000.

(Photo by Andrew Burton/Getty Images)

Words like “surreal” and “dizzying” were used a lot over the last couple of weeks to describe the atmosphere at major fall auctions of Impressionist, modern and especially contemporary art at Christie’s and Sotheby’s, as prices for individual works shattered records, hitting new nine-figure highs, and overall sales of contemporary art surged to a new record. At the end of the two-week marathon that started at the beginning of the month, the tally for the two houses was $1.8 billion, roughly double the typical level of about five years ago and triple what it was a decade ago, when an average healthy season might net about $500 million.
Building on a trend that first became evident as the contemporary art market gathered steam around 2005 and 2006, the volume of sales of contemporary art far outpaced that of Impressionist and modern works, with contemporary art accounting for $1.25 billion at Sotheby’s and Christie’s compared with a $527 million for the earlier offerings. That trend subsided somewhat after the economic downturn finally caught up with the art market in late 2008 and there was a pronounced emphasis on blue chip Impressionists and early modern artists like Claude Monet and Alberto Giacometti. But contemporary art has clearly returned in full force. Last week, Christie’s led the category with a $782.4 million total for day and evening sales, while Sotheby’s comparable tally was $474.3 million.

Even before the sales, the number of eight-figure presale estimates on individual works was generating buzz: there were 17 at Christie’s; and six at Sotheby’s. At Christie’s all but one — Andy Warhol’s “Mercedes-Benz W 196 R Grand Prix Car (Streamlined version, 1954)” (1986), with a $12 million to $16 million estimate — hit the mark, and Sotheby’s wound up with nine such prices, even more than expected.
And after last week, each house could boast a $100-million-plus price tag for its respective top lot. At Christie’s it was $142.4 million, for Francis Bacon’s 1969 triptych portrait of painter Lucian Freud, and at Sotheby’s it was Warhol’s “Silver Car Crash (Double Disaster)” (1963) brought $105.4 million. It wasn't so long ago that only Picasso could break the $100 million mark; the first painting to do so at auction was his Rose Period “Garcon a la pipe (Boy With a Pipe)” (1905), which scored $104 million at Sotheby’s New York in 2004. Christie’s also captured the new record for highest price for a living artist when Jeff Koons’ monumental “Balloon Dog (Orange)” (1994) climbed to $58.4 million.
Can such astounding results possibly continue?
Immediately after the sale, Brett Gorvy, Christie’s worldwide head of Postwar and contemporary art asserted, “this isn’t a bubble, it’s the beginning of something new.” In a later interview, he pointed to the progressive growth in recent seasons, including the record evening sale last May of $495 million, and said the house's latest sale marked “a successful continuation."
"Basically we created a very strong foundation," he added. "The depth of bidding on those top lots, it is not something that is coming out of exuberance. It’s very controlled.” Gorvy points out that between seven to eight bidders were still in the running for the Bacon triptych even after the price hit $90 million.
Some experts expressed reservations about the likelihood of continued growth. Longtime New York dealer David Nash, director and co-owner of the Mitchell-Innes & Nash gallery, who called last week's results  “phenomenal,” acknowledged that “it’s definitely a new era. But whether that will last for the next sale or the one after that," he said, "I don’t know.”
He added, joking, “I had this idea I would go to the auction and ask if I could pay with tulip bulbs.”
Nonetheless, Nash concedes that there is a “wave of enthusiasm” for Postwar and contemporary art. “I think it’s for a number of reasons,” he said. “There were many first-class paintings in that category on the two nights, and secondly it is very difficult to get first-class Impressionist, Post-Impressionist and even early modern paintings. There is an enormous amount of money washing around, and I think there is a real feeling that this is a good place to to put money — into something tangible.”
Indeed, many experts see the explosion in contemporary prices as a supply-and-demand issue, given that the best examples of Impressionist and modern art have largely been snapped up by major institutions and private collection, leaving growing ranks of massively wealthy buyers to pursue the best of what’s out there now — meaning classic Postwar names like Bacon, de Kooning, Twombly, and Richter.
The New York dealer Dominique Levy noted the surprising depth of the bidding for top lots. Where there used to be slimmer pools of bidders chasing particular categories — European buyers interested in European artists, American collectors bidding on Americans — “the very big difference [now] is that you are  looking at a global market,” in which new collectors are competing with seasoned buyers on a level not seen before.
Asked whether she thought anything in particular explained the high level of eight figure works on offer this season, Levy — who bought Lucio Fontana’s ovoid-shaped canvas “Concetto Spaziale, La Fine Di Dio” (1963) for a record $20.9 million at Christie's on Tuesday night — said, “there is not just one answer for why people decide it’s the right time to sell." She added that she believes the current level of knowledge and connoisseurship that goes into collecting is remarkable. "I don’t buy the idea that people are cashing in.”
Nash, however, says he sees at least some speculative elements in the market. “I was a little surprised to find that many of the people who would normally be buyers were actually sellers,” he said, noting that Peter Brant and Steve Cohen both sold major works this season. Brant was the seller of the orange Koons balloon dog, while Cohen consigned several works to Sotheby’s, including Brice Marden’s “The Attended” (1996-99), which took in an above-estimate $10.9 million; Gerhard Richter’s “A.B. Courbet" (1986), which went for $26.5 million; and Warhol’s “Liz #1 (Early Colored Liz), which sold for $20.3 million.
Of these sales, Nash said, “it clearly means there is a huge element of trading.” And under the $10 million level, he added, “I noticed that there were pictures that have just been painted or on the market in the last five years turning around at much higher prices. I think that’s a little troubling. But there is no doubt that there are newer buyers out there who are willing to spend.”

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