ArtTalk: That $100,000 painting bought to flip? Yours for about $20,000
Art dealer and collector Niels Kantor paid 100,000 dollars two years ago for an abstract canvas by Hugh Scott-Douglas with the idea of quickly reselling it for a tidy profit. Instead, he is returning the 28-year-old artist’s work to the market this week at an 80 per cent discount.
Such is the new art season. At auction houses in London and New York, sellers are preparing to bail on their investments after the emerging art bubble burst and the resale market for once sought after artists dried up.
“I’d rather take a loss,” said Kantor, who is offering the Scott-Douglas work at the Phillips auction in New York on Sept 20. “I feel like it can go to zero. It’s like a stock that crashed.”
At auction houses in London and New York, sellers are preparing to bail on their investments after the emerging art bubble burst and the resale market for once sought after artists dried up
Prices for works by young artists such as Scott-Douglas and Lucien Smith soared with the auction market in 2014, sometimes reaching hundreds of thousands of dollars, when they were traded like bull market tech stocks. However, since auction sales began to drop in late 2015, the emerging names have been hit especially hard. Sales by some artists are down 90 pc or more as the glut of work and nosebleed prices scare away buyers.
That’s because speculators purchase art to resell it, not to keep it.
‘Economics 101’
“When those speculators realise that there is no end user at a higher price, then they scramble to sell the work before they lose everything,” said Todd Levin, director of Levin Art Group, who advises collectors. “The demand is driven by greed, the selloff by fear. It’s Economics 101.”
Today’s market is a far cry from a few years ago, when young artists churning out process-based abstract work presented opportunities for outsize returns. The works were often created by artists still in their 20s. Smith saw a painting he made while an undergraduate at New York’s Cooper Union fetch 389,000 dollars at Phillips in 2013, two years after it was purchased for 10,000 dollars.
This week, estimates for three Smith pieces are as low as 7,000 dollars. One, from the series he made by spraying more than 200 canvases with paint from a fire extinguisher, is estimated at 12,000 dollars to 18,000 dollars. A bigger spray work sold for 372,120 dollars two years ago.
“This whole year has been a big readjustment, a much-needed one, like a chiropractic session,” said Timothy Blum, co-owner of Blum & Poe Gallery in Los Angeles, New York and Tokyo. “It can hurt, but you come out on the other end better than before.”
Scott-Douglas’s untitled canvas, one of several resembling a sheet of blueprint grid paper, is estimated at 18,000 dollars to 22,000 dollars at Phillips’s ‘New Now’ sale. The work was part of the artist’s sold-out exhibition at Blum & Poe in 2013, when it garnered 25,000 dollars.