Felix Salmon takes issue with Bloomberg‘s story claiming a return of price levels in the market for Damien Hirst’s work. To recap, Bloomberg’s Scott Reyburn notes that estimates for Hirst’s work have returned to a pre-crash level. Salmon drills down on that:

His sole datapoint supporting this assertion? That a Hirst butterfly painting is coming up for auction with an estimate of £450,000 to £650,000. A substantially identical painting sold at the top of the market — the “Beautiful Inside My Head Forever” sale — for £1.6 million. Which means, I think, that Hirst values are actually down about 66% from the peak.

Reyburns story relies on an analysis of the Hirst market that previously predicted the 2004 Pharmacy sale would flood the market and depress prices. But our own report for Sotheby’s last year shows that Pharmacy sale ignited the Hirst market. Yes, it had a brief impact upon average prices as sales volume rose sharply, then dropped for two years.

Using data provided by Artnet from their Market Performance Report on Damien Hirst, we can see […] the $20 million Pharmacy sale in 2004 jump-started the public market for Hirst’s work. […] It took the art market two years to digest that volume of work but Hirst’s annual sale volume never dropped below the 2003 level, though it did take until 2006 for average price to rise above the 2003 peak.

However, the most important fact surrounding these numbers was the growth of the Contemporary art market. The huge volume of the Hirst sale last September combined with the contraction of the Contemporary art market should keep Hirst’s total sales volume and average price below the extraordinary levels of the BIMHF sale.

Hirst: Still Weak (Felix Salmon/Reuters)

Sotheby’s Art Market Review (Sotheby’s)