With this week’s London Old Master sales, the extraordinary 2014-15 Art Market year will be complete. And though the record sales have created an impression of invincibility in the market, there are many indications that the overall health of the art trade is precarious. (There are some who tell you that a crash is unlikely but crashes are not the only adverse events in a market.) The problem doesn’t lie in a lack of demand. Rather, the vertiginous rise in auction totals over the last year seems to have created an environment where no price has any meaning.

Private collectors a dealers complain that works seem to be priced randomly with some sellers sticking to their number and others rapidly reducing the ask. Dealers are trapped in a universe where buyers don’t seem to trust a price unless they see a competing bid. Auction houses have subsidized prices for the very top works with guarantees. But that practice seems to be causing blowback on the rest of their consignors.

Last week’s sales in London provided everyone an opportunity to recalibrate. The question is whether the lessons of the sale will be learned by sellers or  will they remain truculent absent an exogenous event that forces a sale? Will the auction houses continue to aggressively guarantee works or use the 2015-16 auction year to “grow” the market in other ways, perhaps by reducing sales volumes or creating new markets in less traded artists?

These are more than passing questions for an art market that seems to be suffering the effects of its own success.

On the issue of prices, here’s Scott Reyburn in the International New York Times:

The price tags were too high,” said Morgan Long. director of art investment at the Fine Art Fund Group in London, who attended all three sales. “They were putting A+ prices on B- works. There’s a point when people accept things like that, but when things get uncertain in the rest of the economy, people do step back and say, ‘Is it worth the price that’s been put on it?”’

And Colin Gleadell in the Telegraph:

But although Christie’s hit its target with a £95.6 million sale and sold 87 percent of its lots, it was noticeable that, as at Phillips, half of the sales were made on or below the lower pre-sale estimates. Sotheby’s meanwhile continued to back its summer sale with the highest value auction it had ever amassed, estimated to fetch over £160 million including the buyers’ commission charges. However, what was to have been the week’s climax turned into something of an anti-climax. The sale total of £130.4 million was Sotheby’s highest ever for a contemporary sale in London; but it missed its target. […]

So, while the week was peppered with strong results, the overall impression was one of restraint – restraint by buyers against the rising hopes of sellers when they reach unrealistic levels.

At Art Auctions, Missed Expectations for Some Big Names (The New York Times)

Art Sales: London shows some restraint  (Telegraph)