MELISSA BLOCK, host:
Last night's contemporary art auction at Sotheby's made about a third less money than expected. The same thing happened last week at auctions of impressionist and modern art. Along with just about everything else, the art market is suffering from the economic downturn. In this case, as NPR's Margot Adler reports, it may simply be a retreat from excess.
Unidentified Auctioneer: At $32 million then, are you certain, certain?
MARGOT ADLER: The "Dancer in Repose" by Degas went for, if counting Sotheby's fees, $37 million, somewhat less than estimated, but still a staggering sum for a work on paper. A painting by Kazimir Malevich went for $60 million, even if there was only one interested buyer. More than a third of the works didn't sell, and Sotheby's spent the weeks before the auction negotiating lower guarantees, the price the auction house assures the sellers of certain works. Sotheby's expected sales of more than 300 million and got a third less. But Sotheby's principal auctioneer and head of the contemporary art department, Tobias Meyer, says there's still money for great art.
Mr. TOBIAS MEYER (Principal Auctioneer, Sotheby's): But there isn't any silly money around. I was actually quite happy last night being the auctioneer because I was dealing with a responsible and intelligent audience. And I like that. I felt happy about that.
ADLER: Ian Peck, the CEO of Art Capital, a kind of bank for the art world, says what you're now going to see is less speculation.
Mr. IAN PECK (CEO, Art Capital): A lot of real collectors who started collecting 30 years ago, 40 years ago in some cases, the market got so overheated that they really weren't a buyer anymore. But as prices come down, they may jump back.
ADLER: Remember, he says, auction houses and galleries sell $30 billion worth of art a year. But the average price for a work is $7,500. Collectors may find this a good time to get great works at fair value. Jane Collier is co-owner of the gallery Santa Tien(ph) in Manhattan. She specializes in Austrian and German expressionism. She watched the value of one artist she deals with, Egon Schiele, go through the roof. It was just like executive compensation, she says. Five years ago, a work would have been lucky to go for $2 million.
Ms. JANE COLLIER (Co-Owner, Santa Tien Gallery): Suddenly, a top Schiele watercolor could command $5 million, and then it was $10 million. And this is within the space of five years. Now you have a situation, you know, somebody might have had $2 billion six months ago, and now they've got $1 billion. Well, that's still a lot of money.
ADLER: She says if prices are cut in half for a lot of the record-breaking artists, that would still be a perfectly sound art market. The last art market bust was in the '90s, she says. Prices got so low, the market froze and quality art disappeared. So far, she says, that is not happening. Her gallery - knock on wood - is doing OK.
Ms. COLLIER: The good news is that there is still an art market, and there are still people buying if the quality is there and the price is correct.
ADLER: Josh Behr(ph) is the editor and publisher of the Behr Facts(ph), an industry newsletter that covers the art market. There will be big loses, he says. If you're a gallery in Chelsea that was barely making ends meet, your doors will probably close.
Mr. JOSH BEHR (Editor and Publisher, Behr Facts): The speculative fever for emerging and young artists, I see that being finished. I see the notion of this as an investment pie stopping. I see people who've been prepared for this who are sitting on cash, waiting for opportunities. The biggest challenge is that no one knows what a price should be on anything. And it's very hard to transact any business between a buyer and a seller when neither one of them knows what's a correct price.
ADLER: But on the good side, 20 years ago, he says you might go into a gallery in Soho, look at an object, think about it, do some research, come back again and finally buy it. You'd have a commitment to the object, instead of being forced to buy it in 30 seconds. Now we'll go back to having time. Jonathan Binstock, senior adviser for postwar and contemporary arts for Citigroup, a service that helps clients build collections, agrees. Works are selling, he says.
Mr. JONATHAN BINSTOCK (Senior Adviser for Postwar and Contemporary Arts, Citigroup): I've been buying. It's just at a slower rate. And buyers are having more time to consider. There isn't this mad rush.
ADLER: As the art market continues to find its level, a Scottish paper quoted German artist Gerhard Richter saying though some of his own paintings were going for millions, no works but those of Leonardo and Raphael should go for more than a million dollars. Here in New York, Sotheby's Tobias Meyer was a bit more philosophical.
Mr. MEYER: We are not clairvoyants. I also think we're not curing cancer. So we have to have perspective and a sense of humor about what we do. It is art and it is something that is essential to many people's lives, but it doesn't save any.
ADLER: Margot Adler, NPR News, New York. Transcript provided by NPR, Copyright NPR.
