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Identifying Hidden Treasures: Trends Most Analytics Don't See




Appraising using online databases:


  • Every year new software is launched that promises to provide the appraiser, and subscriber, “the most comprehensive analysis of values for fine art /antiques”.


  • There are over 1200 websites providing sales analytics from auction results for everything from art, to antiques, to cars.


“But while this data is extremely useful, it is important to remember that each work of art is unique and an exact price cannot be predicted based on previous sales. The prices they list can

only give you a very rough guide as to the value of your art.”


-Rebecca Hawkins Private Art Investor, 11/11/2014



The problem is; what information are these databases providing?


Most analytics are comprised exclusively of auction data. This provides less than half the story.


  • Auctions accounted for only 47% of all art sales in 2016, with galleries and private sales accounting for 53%.

  • The percentage of private sales vs. auction sales will continue to increase.


The appraiser’s job is becoming increasingly difficult in light of current trends.


Fine art and antiques are increasingly selling privately, with expanded emphasis on transactions being “invisible” to the outside world.


  • Collectors have become aware of the problems associated with sales prices posted online.

  • Exceptional examples sell for more money privately than at auction, so auction data, and analytics using auction data, don’t accurately reflect the current market values of some artist’s work.

  • Auction houses list privates sales as the fastest growing segment of their industry.

“INVISIBLE SALES” - PRIVATE PLACEMENT


WHY PRIVATE PLACEMENT CONTINUES TO ESCALATE


Works can be presented privately and discreetly – less risk to the seller. Works can always be sent to auction if not sold privately


Collectors do not want public attention or scrutiny.


Top collectors demand “fresh” works that have not been presented.


Art has become a commodity. Exceptional works at every level can command several times more than auction records show.


Auction houses are aggressively expanding their private sales departments, and increasing their revenue and profits.




“Private transactions at Christie’s, however, increased 25 percent, to £694 million. The largest of these was the Joint acquisition for 160 million euros, or $170.8 million, of Rembrandt’s wedding portraits of Marten Soolmans and Oopjen Coppit by the Louvre Museum in Paris and the Rijksmuseum in Amsterdam.”


-NY Times, Feb 9, 2017





Artprice Auction records for Rembrandt Van Rijn paintings


FINDING NEW MARKETS:

Many Collectors are re-examining specific artists and periods of the 20th century, as well as geographical regions of interest.


With the escalation of prices for world-class artists into a realm only a billionaire can afford, astute collectors are returning to periods and artists they previously overlooked.


  • Many of the best paintings are being sold privately at premium prices.

  • Auctions records don’t reflect the increases in interest, only past sales of

  • Museums are including these artists in group or period exhibitions. This reinvigorates interest and recognition.

Many regional artists and works show only moderate value nationally, but bring many times that regionally.

  • Alexandre Hogue was a regional artist from Texas whose work is highly sought after by collectors of American Scene and Texas regional art.

  • The highest sales price for a Hogue painting at auction is $65,000 in 2002.


However, several significant paintings by Hogue have sold privately in recent years for prices between $600,000.00 and $1,100,000.00




-Alexandre Hogue Across The Valley-Taos, 1929, 20 x 36 inches.


Sold to a dealer for over $635,000.00. Resold to a collector for just under 1 million dollars. At least 2 other important paintings by Hogue have sold for around a million dollars.


NEW GENERATIONS BRING NEW TRENDS, AND QUICKLY!!

Where do we turn for up-to-date, accurate information?


Trucks and SUV are booming in the classic market, thanks to Millennials and Gen-Xers

by Jeff Peek Hagerty Automotive News, September 13, 2017


The C/K has been in the top 25 for the last 16 months, but this is the first time it’s been the highest-rated vehicle. The truck’s Hagerty Price Guide value has risen 4% over the past four months, and it has consistently outpaced both the auction and private sales market for the last 16 months.

“The entry-level market [sub-$25,000] is definitely the most vibrant, with an auction sell-through rate over 72%. That’s compared to 68% for the middle market [$25,000- $250,000] and 62% for the high-end market [$250,000-plus].”


THIS HAGERTY’S AUTOMOTIVE INSURANCE NEWSLETTER PROVIDES SOME INSIGHT INTO RECENT AUTOMOTIVE ANALYTICS.

  • Most buyers aren’t worried about losing $2,000 on a $20,000 purchase, but $20,000 on a $200,000 car? That’s a different story. Also, the stock market has been performing well relative to car values, which may have pulled some of the interest away from those high-end vehicles.”

  • Again, we’re seeing the most interest in the entry level market, and several factors play into that,” Pilarski says. “Rare and desirable cars like Ferrari 275s, Mercedes-Benz 300SLs, and air-cooled Porsche 911s saw huge increases in value over the last five years, but now that values aren’t rising like they were, interest has started to wane.

WHERE ARE NEW MARKET TRENDS ORIGINATING?


Artist’s values are changing every day. Whether rising or falling, you need to identify these changes to provide an accurate appraisal of current values. Here are a few places and events to watch and consider. The good news is that most will be published online as museums and galleries attempt engage collectors and the public.


Gallery representation & exhibitions – Many galleries are presenting retrospectives of artists who were popular previously. Sometimes this is successful, sometimes not.


After Y2K and the beginning of the 21st Century, many artists that were collected in the 1980’s & 90’s fell out of favor since they weren’t “contemporary” anymore. However, there was a resurgence of interest in these artists about 2010. Artists like John Alexander returned to prominence with museum exhibitions, gallery representation and collector demand.


However, auction records are deceiving because of the works that were sold during the period Alexander wasn’t as popular.


-John Alexander “Real Estate Desires”, 1991.


To other artists, Y2K was a death knell from which they never recovered, or only partially recovered, even after attempts by galleries to resurrect interest and restore the artist to prior prominence.


In 1989, Dan Rizzie was so popular that he promoted Dewars Scotch in national magazine ads. Unfortunately, the 21st century has not been as kind. While currently represented by some excellent galleries, Rizzie’s dismal auction records impede attempts to resurrect his art values to earlier levels.


Dan Rizzie art for sale on Art Brokerage.com

DAN RIZZIE

"AVALON, CALIFORNIA 1988"

Limited Edition Print: Lithograph

Size:29x25in |74x64cm Hand Signed: Lower Right Price On Request OBO REDUCED


MANY ARTISTS HAVE FALLEN, OR ARE FALLING, OUT OF FAVOR.THEIR PRIVATE SALES VALUES DECLINE WELL IN ADVANCE OF THEIR AUCTION RECORDS.

When you know an artist’s value is falling, the last thing you want to do is place it at public auction. Instead, the goal is to (hopefully) sell it privately to someone who doesn’t yet realize the artist’s decline in value.


NAVIGATING THE MATRIX OF CHANGE


Artists that are successfully navigating the changing dynamics of the art world are generating new bodies of work. Often this new work is combined with their previous work to create “retrospective exhibitions.” The results of these exhibitions can educate collectors and transform an artists value in very short time.

Prices for all the artist’s work tend to increase, or decrease, based on the critics and public’s reception of the artist’s new direction.


OTHER FACTORS THAT CONTRIBUTE TO FLUCTUATIONS IN THE MARKET VALUE OF ARTISTS


DEATH OF AN ARTIST- Prices increase for a short time, then usually decline


MUSEUM EXHIBITIONS- Generate renewed interest in artists


PUBLICIZED ACQUISITION OF ARTIST’S WORK- Prominent collectors acquire an artist, thus “qualifying” the artist’s value to other collectors.


SO HOW DO WE OVERCOME THESE CHALLENGES? WE GO......



Return to Relationship Building


• Appraising before the advent of the internet.

• How was appraising done?

• Where was the information acquired?

• Developing new relationships: dealers, consultants,

clients and others.

• What was the appraiser-gallery relationship like prior to the internet?

• How has it changed?

• Can were turn to these types of relationships? If so, how?

• Expand relationships with other appraisers.

• Each has their market expertise.


Opportunity knocks


LET YOUR CLIENTS KNOW THAT YOU CAN ASSIST THEM IN RESEARCHING NEW ACQUISITIONS THEY ARE CONSIDERING.


Many collectors/buyers purchase on impulse, or with minimal research, only to be disappointed after the sale.


Other collectors can’t find the private sales information and trends that you may acquire.


Once you develop sources of private sale information, consider letting your clients know. You will become the best resource they have.

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