This look into the Gerhard Richter market over the last 11 years was prepared with data and charts from our friends at Athena Art Finance. It is available to AMMpro subscribers. Monthly subscriptions begin with the first month free. Feel free to subscribe and cancel before you are billed. 

Sotheby’s is offering one of Gerhard Richter’s color chart works, 1025 Farben (£5-7m) in London this March. The work comes to market along with a number of other Richters from different bodies of his work. The color chart’s appearance on the auction block underscores the evolution of Richter’s market over the last decade. In this post, we’ll look at the auction history of the handful of similar color charts and the broader market history for Richter. Driven by the success of the large abstract paintings, the Richter market has moved into a position of market leadership over the last decade. We’ve tried to provide some context around market leadership as well so you can see how the changes in Richter’s market effect the artist’s position within the broader public art market.

Gerhard Richter is a very prolific artist. He has produced the abstract works in large numbers. But the color charts, in the format of the work on offer at Sotheby’s, are a small but distinguished body of work. As Sotheby’s points out in its catalogue essay, “a staggering eleven out of twenty of these later Colour Charts reside in prestigious museum collections worldwide, including the San Francisco Museum of Modern Art; the Museo d’Arte Contemporaneo, Turin; the Kunstmuseum, Bonn; the Ludwig Forum für Internationale Kunst, Aachen; the MKM Museum, Duisburg; the Louisiana Museum of Modern Art, Humblebaek, and the esteemed Prada Collection, Milan.” Adding to the private provenance of the Prada collection, the SFMoMA work is from Fisher family collection and another one of the works resides in the the Daros Collection.

Sotheby’s is offering the work labelled as 357-2 which sold in 2008 for $4m. Another work from that series of three canvases was sold in the market contraction of 2009 for $2.28m. The rise in art market values along with the rise in the value of Richter’s work as a backdrop against the small number of large color chart works left in private hands suggest the £5-7m estimate range could be quite conservative even though the work has a direct guarantee from Sotheby’s and an irrevocable bid.

As we wait for the sale to establish a value for the work on offer, let’s take a brief look at Richter’s position in the overall public art market. Below is chart of the top artists by overall market volume over the last 11 years. One can see quickly that for most of the time period two artists dominated the market, Picasso and Warhol. In the last two years, the Warhol market has contracted for a number of reasons that have yet to be fully explained (and will only become apparent over time.) Below the Picasso and Warhol, there is a broad range of artists whose total sales volume is often dependent upon works selling at the very top of the market.

This chart is busy and somewhat confusing. It is not presented for detail but to make the overall point about Picasso, Warhol and the rising and falling fortunes of a few dozen other very valuable artists.

To make it easier to see Gerhard Richter’s position in this chart, we’ve isolated the German artist from the rest of the names. Here you can see that, in relative terms, Richter’s work appeared in the top ten during nine of the last 11 years. For the last 8 years straight, Richter has been among the top ten artists by public sales volume at the three major auction houses. Much of this prominence comes from the market’s appetite for—and increasing valuation of—Richter’s very large abstract works made with his squeegee method of painting. In 2016, the resurgence of that market when the Ames collection was sold for very strong prices is part of what accounts for Richter’s rise in that year relative to other artists.

The relative market position for Richter only tells us a small amount about the internal dynamics of the artist’s market. Below is a chart from Athena Art Finance‘s database of Richter auction sales over the last 11 years.  We’ve written in some detail about the rise of Richter large abstract market and followed up on that. You can see some of the effect of those sales in the run up from 2009 to 2012 as the volume of works and average prices rose steadily to peak at $3m.

Average prices can be effected by different price effects. A few very valuable works can skew the average price up; an expansion in the volume of lower-priced works which often follow the establishment of a new high price can bring down the average price. You see some of that effect in the lumpy market from 2012 to 2014 as the sale and resale of some of the large abstracts made both the volume and average prices of Richter’s works rise and fall. Starting in 2015, however, the average prices for Richter’s work stayed in a narrower range of $1.5m to $1.2m even though the sales volume fell to nearly half that of 2015.

Since we already know that the three Ames works were sold in 2016, we can’t ascribe the steadiness of average prices to the lack of high-value works. To put it another way, the three Ames works would have skewed the average price much higher were it not for numerous other lots sold at lower prices.

Without going into the details of 2016’s sales versus 2017, the Richter market was able to contract—the sales volume declined by approximately the value of the Ames works sold in the previous year—without having a significant decline in average price. So the value of “middle market” Richter has risen to meet the relative price expectations of a large Richter abstract. So, despite the decline in market volume, Richter’s mid-level prices appear to continue on a rising path.

Rising values for mid-priced works suggest a broad level of price stability for the artist’s work. This, in turn, has some broader implications.

The public auction market is used for price discovery in the art market. When a fair price is unkown, buyers and sellers use the public market to establish a competitive price. It would appear from this data that over the last three years, the test and re-test of Richter auction prices (surely helped along by direct and third party guarantees) has confirmed the artist’s price level.

Richter himself objects strenuously to his art works being used as an asset. Nonetheless, it would appear that Richter’s art is more stable in terms of asset value than it has ever been before.

More to the point of the upcoming London sales, the variety of works ranging from squeegee and color chart asbtracts to landscape and other works suggest the price stability in Richter’s market is making it easier to sell from his wide oeuvre.