Market Insights: Assessing the Value of Art
Wilfred Lang: New York, Oil on canvas.
The Value of Art
How do you know if a work of art is truly worth $5,000 or $50,000 or even $5 million? What determines the value of art? To art world outsiders the range of prices, even within the oeuvre of a single artist, can be mystifying. Other than work purchased directly from the artist, or the artist’s dealer, all art purchases are secondary-market transactions which, if the artist achieves a degree of stature, is inevitable during his or her lifetime. Once artwork passes out of the hands of the first buyer, its commercial value is largely ascertained by a number of factors. Understanding how value is determined is essential when assessing the relative importance of information disclosures and representations made in art market transactions (and those of similar collectibles). This summary of Sotheby’s The Value of Art series illuminates 10 factors experts use to help determine the value of a work of art.
Authenticity. “Authenticity is the soul of the object,” says Chinese works of art expert Nicolas Chow, adding “Anything that is worth something is worth being faked.” Subject matter experts and specialists employ a variety of measures to identify true originals. Sometimes consulting an artist’s catalogue raisonné is enough to affirm authenticity, but some pieces may require sleuthing for clues that only a seasoned expert would think to question. Examples of how detective work is conducted are endless, but one of many reference points experts utilize is time itself. The time frame or period in which a work is said to be created yields clues to what raw materials, products and services were, or were not, available at that time. Examples might include, but aren’t limited to, how the item was processed (e.g: fabrics, metalworks, etc.), chemical analysis (e.g: oil paints, wine, etc.), carbon dating (paper, color pigments, etc.) and much more.
Catalogues Raisonnés. In, The Value of Art: Money, Power, Beauty, author Michael Findlay notes that until the advent of the camera, it was difficult to document and accurately record the full extent of any artist’s body of work. Scholars of pre-modern art have to rely on documentary evidence, such as artists’ handwritten lists, records, bills of sale, letters, known public commissions, and the like. By the time of the Impressionists (early 20th century), the camera was in popular use and it was standard for artists to have their works photographed. This aided the creation and use of catalogues raisonnés (literally, “critical catalogue”), an essential tool in determining supply, and typically indicates date of completion, and past and present owners of each work listed. In this regard, an expert or specialist will combine the information in the catalogue raisonné with his or her own knowledge of current ownership and infer how many (or how few) of a particular type of work are (or were) available to be sold. So, a catalogue raisonné has a strong effect on the value of an artist’s work because it defines supply empirically and provides the basis for reasonable assumptions regarding whether any particular work might be available.
Condition. Perfection is a nuanced matter. The impact of condition on value is often a function of culture and changing tastes. “Some people might want their Dutch landscape to look like it’s been sitting over a smoky wood fire for the last century,” says Old Masters Paintings specialist Jonquil O’Reilly. The paint might be cracking on the surface of a canvas, but is that a signature feature of the artist’s work, or a sign of damage? Fifty years ago, American buyers of Impressionist paintings liked them to be bright and shiny, which sometimes led to them being over-cleaned and heavily varnished. Many galleries and even major museums automatically relined these paintings, gluing a second canvas to the back of the original, often using heat and wax in the process. Today, buyers of Impressionist works will pay a premium for paintings that are not relined and have only modest restoration. Seasoned experts can correctly assess a work’s physical state and understand how condition impacts value.
Rembrandt Harmenszoon van Rijn: The Mill, 1645-48; Oil on canvas.
A condition report is a document itemizing the result of the physical examination of a work of art by a trained professional, usually a specialist in the conservation and restoration of artworks similar in medium, period, and style to the work being scrutinized. The stronger the credentials of the professional, the more weight is given to the condition report. Art dealers and auction houses tend to produce succinct condition reports with one-line conclusions such as, “Overall good condition for such a painting of this period.” Conversely, conservators who work exclusively with museums tend to produce extremely technical, detailed and lengthy reports. Conservators who work with a variety of private clients, galleries and museums tend to use less technical language and instead, compare the condition of the work, its age and authorship, with the norms for the period in which it was said to be created. A certain amount of wear and tear and prior restoration might be expected with any Impressionist painting over a hundred years old, while similar conditions in a Minimalist painting dating from the 1960s might make it unsalable.
Claude Monet: Impression, Sunrise (Impression, soleil levant), 1872; Oil on canvas.
Provenance. Once a work of art enters the secondary market, it has achieved a history of ownership called provenance – from the French word, provenir, meaning “to come from,” – it proves the history of ownership of a specific, valuable object. The interplay between a work’s provenance and the marketplace thrives on the ineffable magic of a storied provenance. If a rare porcelain vessel belonged to the Qianlong emperor, or a flawless diamond was worn around the neck of a duchess, or a Rothko was beloved by a Rockefeller – those objects and others with fascinating histories of ownership are imbued with an incalculable allure beyond their intrinsic value.
Mark Rothko: White Center (Yellow, Pink, and Lavender on Rose),1950; Oil on canvas.
“Provenance is my favorite part,” says Frank Everett of Sotheby’s Jewelry. “Who wore it, when did she wear it, how did she wear it, how often did she wear it. This is what we live for, to get the great stories.”
So how is provenance verified? Provenance can take many forms, and just a few examples include: a signed letter, certificate or statement of authenticity from a widely respected and recognized authority or expert on the artist; or an exhibition or gallery sticker attached to the art; or verifiable names of previous owners of the art; or an original sales receipt etc. Provenance is essentially any document and/or verifiable evidence that the work is authentic. Verifiable is the key word here because even documentary evidence can be faked. In such cases, specialists and experts turn to other sleuthing measures to help authenticate a work of art.
A superb Parure comprising diamonds from Charles Ferdinand d’Artois, Duc de Berry (1778-1820), and other royal family members.
Historical Importance. Similar to provenance, every artwork, piece of jewelry, or bottle of wine, etcetera, is like a time capsule holding clues to the moments they were created. A painting made by Picasso during the early 1940s creates a physical link to wartime Paris, while a prized vintage from Burgundy is an opportunity to taste the past. “Wine is not just an object,” says Connor Kriegel, head of wine auction sales for Sotheby’s New York. “Wine very much has a life to it. People want a sense that when they open that bottle, they’re getting a piece of history that goes back sometimes hundreds of years.” Historical context matters.
DRC Romanée-Conti 1945 from Burgundy legend Robert Drouhin’s personal cellar, sold by Sotheby’s NY for $558,000 (including buyer’s premium and taxes).
Rarity. “Good things are so scarce nowadays. We will sometimes forgive the condition issues, if it is rare.” says Mee-Seen Loong, former Vice Chairman of Chinese Art at Sotheby’s. She adds, “You cannot really place that value on the estimate, but you know that excitement is inherent in the piece.” Nothing generates auction-room fireworks quite like when a once-in-a-lifetime work hits the block. This is particularly true for rare wines, paintings, and certain decorative arts. Rarity can feed the mythology of an object, but factoring scarcity into value is a sophisticated equation. Just because it’s rare doesn’t mean it’s great, and if it’s great, doesn’t mean it’s rare. So this is often where the principle of supply and demand comes into to play. “The art market at its core is a supply and demand business,” says Meredith Kirk, a specialist in contemporary art. When bids or prices begin outpacing real market value, Julian Dawes Co-head of Sotheby’s Day Sales advises to take decisions cautiously about the perceived rarity of an item and the price it commands.
Han Dynasty: A rare painted gray pottery figure, Mythical Beast
Size. Size definitely matters. But not the way you might think. In some categories, diminutive objects can be highly valued – in a Chinese works of art sale, the most expensive pieces may fit into the palm of your hand (such as the ceramic above). But in a category like postwar painting, larger scale works can be highly desirable. Frances Christie of Sotheby’s London cites the example of pioneering British artist Alan Davie, who was introduced to painter Jackson Pollock by art dealer Peggy Guggenheim. “The story goes that Alan Davie learned from Pollock to be confident on a large scale,” Christie explains, “Important collectors noticed. Decades later, when one of Davie’s ambitiously scaled works sold for a record price at Sotheby’s, it showed that actually, size does matter.”
Alan Davie: Improvisations for a Gay Ghost No. 1, 1964; oil on board
Subject Matter. There is a lot to be said about certain subjects, fundamentally pleasing images—female nudes, a bright landscape, cultural iconography, something with the color red (historically, it sells better)—there are some subjects that just are consistently pleasing. But beauty is in the eye of the beholder, especially when it comes to art made in the past half century. “One of the great things about contemporary art is its capacity to challenge,” notes Michael Macaulay, head of Contemporary Art evening sales in New York. “And great contemporary art collectors embrace that challenge.” It’s not always the easiest subjects that sell best.
Sandro Botticelli, The Birth of Venus, c.1484-1486; Oil on canvas
The beginning of what we consider to be the contemporary art, is Abstract Expressionism. So, subject matter is inherently moot to that genre, and specifically to be avoided. “We’re not talking about the French salon where you can go “oh, yes, its history painting first, then landscapes, then still life. It about the painting itself, your interaction with the object. Sometimes, it’s a challenging composition that’s hard to look that makes it even more attractive. You can identify when the notion you’re challenging isn’t actually an arbitrary impediment to value. A number of the greatest artworks over the last 60-70+ years provide some of the most fantastic and in some cases ‘transformative’ experiences. Its because they’re challenging,” states Macaulay. Subject matter doesn’t always speak to today’s audience.
Jenny Saville, Reflective Flesh, 2003; Oil on canvas.
Medium. Many great artists experiment with a range of methods and means, and this is why it is one of the first things specialists and experts review when evaluating artwork. While there tends to be an unwritten hierarchy of material (e.g: oil on canvas for painting; marble for sculpture), some artist’s ideas might translate best in pastel on paper or lithography, etc. Most experts and specialists believe that mastery of the medium, clarity of execution, and authority of expression are vital criteria applicable to all works of art, regardless of style or subject. It is what separates a successful work of art from one that may be merely interesting or typical.
Maggie Simonelli Pale Pink Lotus with Golden Bamboo from the Vera Conversazione d'Amore Group 2014; Encaustic (cosmetic grade beeswax), 24 kt gold leaf, cosmetics: Chanel 65 Insolente lipstick and Chanel 93 Impulsion eye shadow, casein, Rose d'or, Chinese cinnabar, Arabian malachite, aluminum leaf, bee pollen, and essential oil of Lotus on birch panels.
Quality. Is quality understood instinctively or calculated by a formula? For some it means craftsmanship, while others measure it by technical innovation, and many use the word “timeless.” Ian Kelleher of RM Sotheby’s describes it as a mix of all three. In speaking of the engine of a Ferrari and other classic automobiles, he states that they are “things of beauty. Quality will last a lifetime. Many of these cars just will not change hands.”
Vintage 1961 Ferrari 250 GT SWB Berlinetta.
Surprisingly, quality is thought to be rather subjective. Not everything created by a well-known artisan is a masterpiece; some works are worth little more than an autograph. An eye for quality is trained simply by seeing as much as possible, in person, by a particular artist and artists of the same school.
With enough purposeful exposure, one can gain understanding and perspective on what constitutes a standard of quality against which a piece can be judged. Quality is, essentially, the degree of excellence of a thing when measured against other things of a similar kind; it is the distinctive attribute or characteristic of something.
The same method for developing an eye for quality can be said for refining one’s palate for fine wines and other collectibles.
Fashion. “A great Andy Warhol painting from 1963 is like a Chanel suit – it never goes out of style,” says contemporary art expert Meredith Kirk. Some works transcend their time; many soon fall out of favor, while others take a generation to gain appreciation. Though experts can’t predict what will come into and go out of favor, they provide guidance for navigating the unpredictable landscape of trends by embracing one core principle: buy what you like.
“If you’re thinking about buying a work of art, it needs to resonate with you personally,” advises Brandei Estes, Head of Photography Sotheby’s London. Trends change. Buy because you like it, not because someone tells you that you should like it because it’s deemed important. Her colleague,Courtney Kremer, emphatically agrees, “If you’re not buying something you love, then you’re not doing right!”
— Christina Spearman