Issue #141  3/10/2008
Photo Art Market: Up? Down? or How About--Like The Movie--Sideways?

By Alex Novak

While I have always been a little taken aback by those brave and foolish souls who preached about a new paragon for the art market that was an everlasting economical art pyramid that would continue to grow by 200-500% each year, I am equally nonplussed by those chicken-little-the-sky-is-falling types that have lately cropped up. Actually, it is very droll to see that they are usually the very same exact inaccurate prognosticators.

One shrill art consultant's newsletter has been predicting the utter collapse of the art market now for the last four to five months (and she seems terribly disappointed that it hasn't quite happened yet). The same said person had been hyping the market for several years before as if it would never end to her clients, but now she claims she has been warning us about the market forever (I guess "forever" is anything less than four months). I notice though she hasn't hyped her contemp artist darlings that are indeed in danger of complete collapse from over-hype, such as Ed Ruscha, in at least a month or two, despite--or perhaps because of--his art reportedly being repeatedly purchased at auction by his dealer to protect his pricing. Admittedly, that is a rather common practice, but this reportedly happened many more times than once or twice in this case. Of course, Artnet has reportedly (at least by her) tried to hire her as a columnist. I guess her written ramblings appeal to Artnet's need for more accuracy and balance--or is that controversy and hysteria?

ArtPrice.com and several other such "services" have also been decrying the market "crash" in a pr-marketing blitz, as if it has happened already, misusing their auction data in a way that would make any real economist scream. Using such data with unique pieces is indeed like comparing apples to oranges. I guess they think that collectors and dealers will rush to buy their services if they run around screaming, "The sky is falling, the sky is falling!" By the way, they did this in 2000 as well, not to say that the situations are the same, but just to illustrate that this is merely a misplaced marketing tool rather than an accurate and responsible report. 2001 and 2002 were two of my (and other dealers, as well) very best years in the business. I know I certainly won't be buying the services of these hysterical turkeys.

Lately I haven't been keeping up with the Wall Street Journal, but you can always count on them to announce in their headlines the exact opposite direction for any art market. Trust me: they've been extraordinarily and consistently wrong on the art photography scene.

Even the respectable Art Newspaper headlined a recent story: "Everyone is wondering whether the downturn will be like 9/11". Well, maybe; but that time period just after (2001 and 2002) wasn't particularly horrendous at all, quite the contrary, except for the years after when we actually went to war with Iraq (2003 and 2004). The drop off was certainly not due to the economy, but more to the distraction. And most photography collectors probably didn't even notice the latter dip; although the galleries and private dealers certainly did.

Of course, eventually they will all be correct in some ways. Eventually all that goes up speculatively must indeed come down the same way. But does this really tell the true story of the overall market and is it helpful to collectors in any way?

You might want to review what I said about the state of the photography market 2-1/4 years ago (http://www.iphotocentral.com/news/article_view.php/103/97/527). It's particularly relevant today, given that I predicted some parts of the market might see some deflation within 2-3 years.

Let me encapsulate what I said back then: people buying without thought to value or checking on said value will overpay, and those inflated prices of some of these photographs will see some correction within three years, or during the next economic downturn.

Does this mean that the photography market is crashing and burning? I frankly doubt it. Quite the contrary: core good values and photographers whose work is undervalued will most likely go up in price during this period, albeit a bit slower than in the past. And photography will generally hold up better than the overall contemporary art market, as it has in the past--excepting those parts of it that have acted more like the contemporary art market.

It's always difficult to predict the future, but some things never seem to change. What goes up quickly and unreasonably will inevitably come down. When Irving Penn's "Moroccan Woman" in platinum is reportedly being offered at over $1.2 million by his dealer when it was selling for $312,000 at auction just a little over two years ago, you have to wonder if these kinds of hyped-up prices will hold. I frankly doubt it, especially when you realize that this is a late printed photo that is in an edition of 40 (plus there is another edition of 40 in silver). It is not rare by any stretch of the imagination, although I am sure that some dealers will argue that these prints are rare because they are in collections which will never sell them. Horse pucky. At $1.2 million (if that was a real price), I would say you would have a lot of sellers out there.

At the last set of auctions, you saw some cracks in the Irving Penn dam, because too many of them (and of the same kind) came out at once at both Phillips and Christie's. Don't expect that mistake again from those houses. Some of the prints sold for a quarter of what they usually do or bought in--although they were also some of the worst prints that I or other dealers have seen, which is a real oddity for Penn who usually produces beautiful prints.

Now it happens that I like and sell Irving Penn's work, and I really don't mean to pick on him, but rather to use him as one example. It's just that many of his photographs have seen an extraordinarily steep rise in price, aided by his dealer's aggressive underbidding. That is perfectly legitimate but leaves me feeling that this is a thin and dangerously overpriced market--for some of his images. I feel that many Peter Beard, Horst, Richard Avedon, Helmut Newton and Robert Frank prints--also aggressively bid up by their dealers--are equally overpriced. Again, I think all of these photographers are fine and important artists, and there are examples of their work which are not overvalued. It is just that at least some of their work selling for these inflated prices is neither rare nor, in a few instances, particularly good examples of their best artistic work, but merely sexy or gratuitous imagery. I still think some of the work for each of these photographers is undervalued, although it is getting harder to find those photos. Look for very low editions (15 or under; and with only one edition, not multiples) and vintage prints of strong, important images. Of course, if you have money to burn and don't care if you waste it on decorating, forget everything I just said.

For the short term, you might be surprised, but I feel that the photography (and even the art) market will continue to increase in price for about the next year, as money floods into the art market as a place that is "safer" than stocks, real estate or even bonds in the stag-flationary scenario that some are predicting. This happened in 2001-2002. Especially in view of an exceedingly weak dollar that makes artwork and photography look incredibly cheap to non-Americans. If you're from Brazil, you can scoop up the bargains. When was the last time you could say that the Brazilian real was stronger than the almighty dollar? Thank you, President Bush.

The dollar even touched $1.5459 per euro, the weakest level since the euro's debut in 1999, before recovering a bit this past week. In fact, the synthetic euro, which estimates the European currency's value before its inception in 1999, advanced to the strongest level since at least January 1989.

What that means, and what I, and others, have actually seen in terms of sales recently, is that Americans will find that they will be competing with international collectors for top pieces, which may cause prices to rise, at least temporarily.

Furthermore, the art and photography markets have always lagged the actual economy by about 12-18 months (both going in and coming out). Expect this historical trend to hold up this time too. Most dealers that I have talked to have not experienced any fall off in business. Quite the contrary, my own business, for example, had one of its best January-February sales ever.

None of this is to say that we are not facing some serious economic news and that it will not have an eventual effect on the market.

So what does a committed collector do? Well, the prescriptions are not all that much different than what one should do normally.

1.) Buy the best piece/s that you can afford. As major collector Michael Mattis observed in a recent conversation, there was a big disparity between the stellar performance of photography in the major Fall auctions (both Photographs and Contemporary sales), compared with the three lackluster mid-season NYC Photographs sales in recent weeks, and this disparity suggests that a 'flight to quality' is taking place.

2.) Do your homework and make sure that you are not overpaying for work. See my article on "The Insider's Guide to Buying Photographs" for good tips on how to avoid doing this at: http://www.iphotocentral.com/collecting/article_view.php/7/5/1 .

3.) Consider avoiding overpriced portions of the market (post-1950s and some contemporary art pieces). Or at least take care in picking out the gems that are still left and undervalued. Some photographers from the period are highly influential, but have been by-passed temporarily. Those are your bargains.

4.) Avoid "decorative" pieces (late-printed, etc.). With housing sales slowing, such print sales may fall off a bit. Of course, if you are merely decorating and like and want the image, by all means buy it. Just don't expect it to go up much in value soon.

5.) Consider looking at underpriced areas of the market, such as early 19th-century photography, but only the top pieces. Rumors have a couple of major 19th-century collections coming on to the market and this usually brings higher prices. We have already seen this at some of last year's French auctions. The top material is truly rare, often unique and important to any serious institutional or broad individual photography collection. There just isn't enough such material to go around. One very savvy French dealer told me recently that if the Jammes collection were to be auctioned today, he felt it would sell for more than three times what it did just six years ago.

6.) Consider looking at vintage work from overlooked, but important photographers of the 20th century, such as French mid-level photographers, Chicago School of Design photographers (I think Aaron Siskind's and Arthur Siegel's better early work is still terribly undervalued, but the market is starting to catch up), and photographers who have plateaued for a while, for example Josef Sudek, Helen Levitt, Clarence John Laughlin, W. Eugene Smith and Barbara Morgan.

7.) Shop carefully for top photographer's work, which is still often available at decent prices. The photographs of major photographers, such as Edward Weston, Andre Kertesz, Alfred Stieglitz, Dorothea Lange and Edward Steichen, have all been available at times for what seem like reasonable prices. Of course, much of the work of these same photographers sells for extremely high prices. Those high priced pieces will eventually pull up the value on other strong pieces from these photographers. Just shop wisely.

8.) As Mattis once told me, "As a collector in it for the long haul, I like down markets just fine: there is less frenzied competition for fine pieces, and more time to contemplate and finance a purchase--and the dealers are less ornery about time payments!" In other words: Think long term and you will still buy. Key vintage pieces often do not come around again after they go into major collections.

I hope I have given you a little perspective on the marketplace, but, of course, the key reason to collect photography is a non-economic one: that you love and learn from the work.