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The primary story from the London sales cycle in March may have been that Modern art—particularly works by Pablo Picasso—has reclaimed its position at the forefront of an advancing market. That’s a situation we have not seen since the darkest days of the global financial crisis when art buyers defied expectations and continued to spend money on highly valued ‘blue chip’ works.

At that time, the preference for Modern works was seen as a flight to quality. Even as the world’s financial system stuttered and threatened to stall, buyers were willing to spend record sums at auction in 2009 (for a record single-owner sale) and 2010 as two different works (first a Giacometti and then the Brody Picasso) set new auction records for an individual work of art.

Once the art market has proved its durability, the action shifted from Modern works back to an explosion of Contemporary buying as the numbers ramped from 2012 until peaking in 2015. With the Rockfeller sale at Christie’s coming the week before New York’s sales cycle, it looks like Modern art will continue to hold the spotlight.

But what of the Contemporary market? As Picasso leads the Modern market, Andy Warhol has been the pillar of the Contemporary market. The Pop! artist’s market power has been diminished these last few years. Other powerful names in the Contemporary market continue to perform but often without the sort of tone-setting sales surprises we’ve recently seen in the Richter, Basquiat and Bacon markets.

Does that mean Contemporary art is in retreat? The numbers in London, where the Modern market out performed Contemporary by 27%, might be taken that way. And there are good reasons, the impending Rockefeller sale, to believe Contemporary art is being eclipsed. But the numbers tell a different story. The Contemporary market has fewer fireworks these days but there’s a compelling trend for us to examine more closely.

The Evening sales remain powerful drivers of business. The combined Evening sales at Phillips, Bonhams, Sotheby’s and Christie’s were £286m with a sell-through rate near 93%. That figure reflects, of course, the now extensive use of third-party guarantees. But as we will see when we look at the day sales, the strong sell-through rates have become a feature of the category with or without the backstop of guarantees. There’s clearly a great deal of demand for Contemporary art.

Like the Modern market, Contemporary art in the evening sales is very top heavy with the 10 most expensive lots accounting for 41% of the sales total. Even with that weighting, only a few works sold over the high estimates, just 27%. Nearly half of the lots (44%) offered were sold within estimate ranges and another 27% were sacrificed by consignors at compromise prices below the low estimates.

The Contemporary art market is strong but the expectations of sellers remains ahead of the broader market. We can see this in the compressed 1.07 hammer ratio which measures the aggregate hammer value over the aggregate low estimate. Contemporary buyers want the works but they don’t want to pay any more than absolutely necessary.

To go back to our comparison to the Modern market, the Contemporary evening sales had an average price of £1.8m compared to the Modern market’s £2.9m. To be sure, there were fewer Modern works sold. Nonetheless, the average prices in London were arrayed in an interesting straddle. Evening sale works of Modern art were substantial more valuable on average than Evening sale works of Contemporary art. But the opposite was true in the day sales where the average value of a Contemporary work exceeded the average Modern work.

Those numbers set a tone between the two markets where the value is distributed more broadly in Contemporary art and concentrated in a few artists and works in Modern art. We’ll get into that a little more when we look at the market share for individual artists.

 

The list above shows us the top 45 Evening sale works across all houses by premium price coded by the hammer ratio. One can see from the prevalence of red (works sold below the low estimate on a hammer basis) and yellow (works hammered within estimates) in the chart the relative lack of bidding intensity. Within that context, a few works stand out. Peter Doig’s Charley’s Space, Christopher Wool’s untitled work, Alberto Burri’s Ferro T,  a red Fontana slash painting, Antony Gormley’s maquette for the Angel of the North, and even an Andy Warhol work all exceeded estimates.

Acknowledging those strong sales, the list below reveals that the works that saw the most intense bidding (measured by hammer ratio) were lower value objects like Donald Judd’s untitled wall piece (pictured at the top of the post) which had a £350k low estimate and a £1.3m selling price. It is not until positions 8, 9 and 11 on the list of most dynamic lots that we get to any of the Evening sale works mentioned in the top selling works.

Fewer than a third of the top 45 lots by hammer ration, what we call the most dynamic lots, had estimates above £1m. There are buyers all up and down the price spectrum but the band of works estimated below £1m saw much more competition in London this March. That should be an indication of the strength of the so-called middle market.

There’s more to say on that matter when we get to the day sale numbers. Before we get there, let’s look at the market share figures for London. Andy Warhol retains his pride of place as the top name. But his market share is only a little more than 1.3% greater than Gerhard Richter who has also been a powerful driver of the Contemporary market over the last several years. Following closely behind both of those is Peter Doig before we take step down to another almost 2.5% of market share to Lucio Fontana and Jean-Michel Basquiat.

The gap between Picasso with 42% market share in London over Monet with 6% is extreme but the compression of the Contemporary market to the point where six artists split more the same market share is positive sign for Contemporary art. The market share chart (below) represents 75% of the sales in London’s Contemporary market. It shows broad distribution of money spent on these 32 artists even where a few, like Jackson Pollock, are represented by only a single sale.

Also worth noting are the strong showings of Mark Bradford and Cecily Brown whose markets are both going from strength to strength.

Switching to the day sale charts (below) a full 37% of the lots were bid over the high estimates. A slightly higher percentage (39%) were sold within the estimates which means more than three quarters of the day sale lots were sold above the low estimates. A remarkable 87% of the day sale lots were sold continuing a trend that has emerged in the Contemporary day sales in both New York and London. Those numbers show the demand in the Contemporary art market better than the Evening sale numbers. They also testify to the fact that buyers are looking for works they believe are overlooked, undervalued or in a position to appreciate.

The higher 1.21 hammer ration quantifies the observations above. And, as is usual in a day sale, the top 10 lots only made up a small minority (14%) of the day sale total.

Looking at the list of the top lots by premium price, we see far more works that have been the subject of aggressive bidding than in the evening sales. Even here, there are a number of works sold at compromise prices or within the estimate range. Buyers are far from reckless in the Contemporary market at the moment.

When the bidders do throw caution to the wind, they’re playing small ball. The list of most dynamic day sale lots is dominated by works in the five and even four-figure range. Works by Frank Auerbach, Kaws and Wols were among the few highly competitive lots that that were bid into prices above $1m.