Another report from our friend, Howard Rehs, art dealer and market observer:

January is a fairly quiet month for the art auction market. Much of the action can be found in the Fine Art exhibitions taking place around the country. We spent that latter part of January in Los Angeles at the Los Angeles Fine Art Show where over 100 dealers came to exhibit their wares. I can tell you that the crowds were pretty good … thousands upon thousands of art lovers came; and many left with a new work to add to their collection. In addition, from the dealers I spoke with, there was a resurgence of activity in the lower price levels — a segment of the market that has been very quiet over the past few years. Buyers and collectors had been focusing on the ‘blue chip’ names and leaving the ‘new chips’ on the sidelines. This resurgence of activity in the ‘new chip’ market is a very good sign since I believe that once the lower/entry levels of the art market become robust, we will see far more strength in the overall market and higher prices in all schools and levels.

Now I do not want you to think that there was NO activity in the public forums, but much of it was in areas of the art and antiques market I do not follow; however, during the last week of January the New York salerooms offered their Old Master painting sales and the results showed that the market for Old Masters is still a bit picky.

First up were two sales at Christie’s: Old Master Paintings Part I and The Art of France. In the Part I sale the top position was taken by Tiepolo’s The Arrival of Henry III… which made $5.9M (est. $4-$6M), in second place we found Dou’s A Young Lade Playing the Clavichord at $3.33M (est. $1-$2M) and in third was Van Dyck’s A Rearing Stallion at $2.54M (est. $2.5-$3.5M). Now from just those first three results you might say … not too bad! Two out of three met or beat their estimates … but hang on. Of the top three works with the highest estimates only one sold, the Tiepolo; the Memling ($6-$8M) and the Arcimboldo ($3-$5M) passed. And if we look at the top ten works with the highest estimates, only five sold. Since I am not an Old Master dealer, and I was unable to view the sale since I was away during the viewing, I really cannot give you my personal opinion as to why the big lots had trouble; but what is obvious is that really good Old Master paintings are getting harder and harder to find and just because a work carries a very high estimate, does not mean it is worth it.

When this session ended, the results were very telling. Of the 59 works offered 42 sold (71% sell-through rate) and the total take was $34.3M, which was well short of their expected $38.8M (low end of the presale estimate range — also keep in mind, that the final total includes the buyer’s premium while the presale estimate does not). In addition, the total take for the top 5 sold lots was $16.3M, almost half of the total sale’s gross. Oh, here are two additional (interesting) results … this sale included a painting recently attributed to Frans Hals that belonged to Elizabeth Taylor. The portrait was estimated at $700-$1M and sold for $2.1M … the question is, was the high price a result of the painting’s quality, its new attribution or its previous celebrity owner? And, a portrait by Thomas de Keyser blew past its $300-$500K estimate to sell for $1.5M … the buyer, the National Gallery of Art in Washington.

Then we had The Art of France and here the top slot was captured by Fragonard whose Le Jour brought $3.67M (est. $2-$3M). Coming in a distant second was Watteau’s The Union of Comedy and Music at $903K (est. $800-$1.2M) and in third was a Boilly still life at $843K (est. $150-$250K). In fact, all of the top 10 lots either met, or beat, their estimates … sounds pretty good so far. Well, hold on for the final numbers … of the 44 works offered, only 25 sold (57% sell-through rate) and the total take was $10M and they were expecting at least $14.9M. In addition, the top 10 lots brought in $8.44M, almost 85% of the sales total.

The next day Christie’s followed with two more sales: Old Master Drawings, Watercolors… (147 lots) and Part II (112 lots). These sales included works with estimates ranging from $600 – $150,000. The two highest estimates in Part II were on works by il Guercino ($150-$200K & $150-$250K) … the first failed to sell while the second brought $267K. Of the 112 lots, 85 sold (75.9% sell-through rate) and the total take was $4.4M. The Drawings and Watercolors had similar results. Top lots in this sale were a Lear at $423K (est. $120-$180K); a Turner brought $339K (est. $300-$500) and a small Guardi fetched $159K ($100-$150K). Of the 147 works offered, 112 sold (76.1%) and the total take was $3.06M.

When all the sales at Christie’s are totaled we find that of the 362 works offered 264 sold (72.9%) and the total was $51.8M … this created a price per lot sold of $196K. Last year’s corresponding sale saw 299 works offered with 210 sold (70%) and a total take of $36.6M … the price per lot sold was $174K. So, they seem to be improving.

On the other side of town, Sotheby’s offered their selection of Old Master works. They started off with Old Master Drawings and taking the top position here was a work Attributed to Pollaiuolo that made $1.4M (est. $300-$400K) … it was purchased by the Getty Museum. In second was a Gainsborough that brought $315K (est. $100-$150K) and in third was a work catalogued as a Follower of Rubens which made $303K (est. $70-$90K). When the session ended, of the 221 works offered only 113 sold (51.1%) and the total take was $5.6M … it is interesting to note that the top 10 lots brought in $3.04M – more than half the total .. even more interesting is the fact that the presale estimate was $4.1 – $5.8M; so they easily made their number with only half the works selling.

The following day they offered their Important Old Master Paintings & Sculpture and the top lot was a Canaletto at $5.7M (est. $5-$7M). Rounding out the top five were Cranach at $5.1M (est. $4-$6M); a Fra Bartolommeo which made $4.9M ($1.5-$2M); Botticelli & Workshop at $4.6M (est. $1-$1.5M) and Martini (not sure if it was made with vodka or gin) at $4.1M (est. $3-$4M).

Of the 350 works offered 209 found buyers (59.7%) and the total hit $62.1M. In addition, as with the Christie’s sale, the top 10 works all met or beat their estimates and brought in $35.9M (almost 58% of the sale’s total).

They then followed with a lower level sale of Old Master works … which, for the most part, was really lower level. The top lot was a Circle of El Greco that made $69K (est. $20-$30K) and of the 88 works offered, only 38 sold (43.2%) with a total take of $414K (lower end of the presale estimate was over $770K) – Yikes! Why bother?

When all their sessions are added up, Sotheby’s grossed $68.1M … a stronger total, but they did it with more works offered (659 vs. 362) and more unsold works (299 vs. 98); so the real question is: was their sale stronger? Well, if we go but the price per lot sold, the answer would be No … theirs was $172K vs. Christie’s 198K; and if you go by the overall sell-through rates … Sotheby’s 54.6% vs. Christie’s 72.9% … the answer still a NO!

What I also find very interesting is Sotheby’s trend. In 2010 they sold $61.5M with a 73.5% sell-through rate. In 2011 they hit $109.2M with a sell-through rate of 61.4% and this year they made $68.1M and the sell-through rate dropped to 54.6% … guys, the percentages seem to be moving in the wrong direction!

In the end, no matter how you want to slice it, the fact is that good works of art are not only finding buyers, but blowing past their estimates; the rest of the works are having a very tough time. I have always believed that a picky market is a very good market. If you buy the best, you will rarely go wrong.