The Art Market

American Decades | Date: 2001

The Art Market

Price Inflation

"Millennium fever" gripped the art market in the 1990s. The London-based Daily Telegraph Art 100 Index, which traces prices of works by the one hundred top artists in the world, reported a price rise of 26 percent from January through November 1998, double the increase for 1997. "The market is extremely strong/' said New York dealer David Nash. "There's a lot of money around, most of it in the hands of Americans and Europeans." Like stock in Internet companies, art works sold for higher and higher prices throughout the 1990s but—as was also the case with internet stocks—prices did not always equate with value. In the early 1990s prices paid for modern masterpieces were already setting records. Constantin Brancusi's 1919 Golden Bird sold for $12 million; Vincent van Gogh's Portrait of Dr. Cachet was bought for $82.5 million; and Pierre Renoir's Au Moulin de la Galette went for $78.1 million. With the art market so overheated, even prices for artists whose works were traditionally widely available were high—for example, Edgar Degas's Racehorses brought $9.98 million, and Henri Matisse's The Persian Robe sold for $4,5 million, By the late 1990s, however, the market seemed to have passed its peak. Van Gogh's Portrait of Dr.Cachet was offered for sale privately in 1998 at an asking price of $80 million.

New Collectors

Many art buyers were new to the business of collecting. Often they were looking for ways to invest money they made in the booming stock market of the 1990s. The new collectors included Japanese businessmen such as Ryoei Saito, who saw art works by established artists as good long-term investments. Another new collector was Las Vegas impresario Steve Wynn, who spent in the neighborhood of $300 million in 1997 and 1998 on Impressionist art to display at his casinos.

The Market for Contemporary Art

American contemporary art sold well in the late 1990s. Art from the 1980s and 1990s had substantial resale value at auction. In 1997 the Museum of Modern Art in New York purchased a complete set of Cindy Sherman's Untitled Film Stills (1977-1980)—sixty-nine photographs—for $1 million. At the fall 1999 auction of contemporary art in New York City, Sherman pieces sold for as much as $96,000, and Christie's in London sold a Sherman piece for a record $144,045. Artists considered controversial in the 1980s made comebacks in the late 1990s. Prices rose for works by Jeff Koons, who outraged the art world in the 1980s and early 1990s by appropriating the works of others in his pieces. He was even convicted of copyright infringement in 1992, after he used a greeting-card photograph in one of his sculptures. Also in the late 1990s a self-portrait by 1980s phenomenon Jean-Michel Basquiat, who died of a. heroin overdose in 1988, sold for $3,3 million.

Source:

Thane Peterson, "These Prices Are Surreal," Business Week, no. 3610 (28 December 1998-4 January 1999): 170-173.

Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.