Issue #153  12/5/2008
Latest Market Observations: The View From Paris and Miami

"Because things are the way they are, things will not stay the way they are."--Bertolt Brecht

By Alex Novak

Paris Photo was decent if not exactly sparkling with enthusiasm. Crowds were up considerably from the strike-affected previous year, but that ironically often made sales more difficult when booths were overcrowded with lookers. Sales were flat to down for most dealers that I talked with, although most of the Americans (and a lot of the Europeans) told me that they broke even or better (which is actually pretty good for this expensive fair).

Even the currently running Art Basel Miami doesn't look that much off (40,000 vs. 43,000 attendees, this year over last year), but the buyers have been more wary at the fairs and prone to dealing more, especially on contemporary work.

I talked with Petaluma, CA photography dealer Barry Singer by phone. Singer was exhibiting at the Art Miami Fair, one of the satellite exhibit shows around Art Basel Miami this week. He told me that he had already sold a $100,000 painting by Kara Walker, plus 16 photographs. That put his totals well into six figures "with over two more days to go" and matched his last year results at AIPAD's Photography Miami Fair, which was cancelled this year. As Singer told me, "It's certainly not a disaster here. We sold pictures to people we know and lots of pictures to new people."

While some of the other photo dealers showing in Miami had more mixed results, most did ok here. That's a pretty decent endorsement of the market considering this was done in a week when it was announced that over a half million jobs were lost in the previous month of November. But then the Dow rallied nearly 260 points on the news, so go figure.

Big contemp art pieces are definitely being affected, which is very problematic for those dealers, although some are still certainly being sold at some pretty nose-bleed-high prices. I would not want to hold any of the high-priced pictures by Richard Prince, Cindy Sherman, Andreas Gursky, etc., unless I was prepared to do so for at least ten years or more. However, Gagosian Gallery reported to the Art Newspaper that business was “surprisingly strong” with six works sold by 5 pm the first day at its Art Basel Miami booth, including an Ed Ruscha, "Woman on Fire, 1990", two Richard Princes and Anselm Reyle’s Untitled, 2008.

I expect that these, along with some of the other higher priced contemporary art flyers, may experience a major dip in value in the near term. But like stocks, you don't take your losses unless and until you have to sell the items. Contemp art has always been a roller coaster ride, reflecting the economy (albeit 12-18 months later). The early word in Art Basel Miami and at the satellite shows was that collectors were looking more at affordable and somewhat smaller contemporary work. Think residential scale rather than industrial scale. Also, collectors and curators seem to be getting more "serious" about work. The silly stuff is being bypassed in this environment--and about time!

Photographs that are readily available (later prints and work that have been made in fairly large editions) will be, and have already been, somewhat affected by the market, especially at auction.

Also, those photographs/photographers that have experienced too sharp a rise over the last three years (think Penn, Avedon, Beard, Horst--late prints, Newton, Lindbergh, Stern, Frank, Weston, etc.) may have some difficulties selling for the more recent sky-high prices, especially at auction.

The Constantiner Collection (with its inch-thick catalogue) coming up at Christie's may be selling at the worst time for this type of market (mostly nudes and fashion images from the 1950s-present), but perhaps the decision to sell it was made before these changes in the market. The estimates, at least, are not excessive, but in this market for this type of material, anything may be excessive. Given the option of time, I would certainly have opted to hold the material instead of selling it right now, but I wish Leon and Christie's good luck.

Perhaps some of the best deals were seen in the recent auctions in London and Europe, where the sudden rise of the dollar (22-25%) made the reduced estimates and reserves seem even more enticing to Americans--although few Americans noticed this phenomenon this time around and the material was not in the top niche. The Spring auctions, if the dollar is still as strong (doubtful), might provide Americans another opportunity. Auctions in London and Europe have largely had poor results, often selling less than half their lots, although the largely 19th-century Jammes sale in Paris (more later in the next issue of the newsletter) did fairly well, even with much more mediocre material then in previous Jammes auctions here at Sotheby's. There were exceptional pieces in this auction, of course, and these did fairly well, although perhaps not as well as they would have just six months ago.

On the other hand, most high quality and rare vintage photographs do not appear to be going down much, if anything at all (maybe sideways for a year or two); although with financial cash flow pressure on many dealers, you may be able to pick up some great bargains in the short term, or at least so I have been told by collector Michael Mattis.

I expect with inflationary pressures that will hit with a vengeance in about two to three years that such vintage prints may even go up--perhaps a lot. When governments start printing money like there is no tomorrow to pay for massive bail-outs and planned infrastructure/building projects, money's integral value will go down and the value of hard goods will all go up accordingly. For a while it looked like we might have to deal with a deflationary environment (due to the collapse in oil and some other commodities), but that no longer looks likely. I think it now looks like a very good time to buy high quality vintage photographs--if, 1. You can find anything worth buying (good stuff rarely comes out during a recession); 2. We don't have a further financial collapse and go into a full-fledged depression (unlikely at this juncture, but the Bush administration has made a royal hash out of the start of the financial bail-out); 3. You have money on hand and enough cash flow (big ifs for a lot of dealers, at least); 4. You have at least a five- or six-year time horizon. It actually appears to be the perfect time to buy for collectors, given these circumstances and a lot of care. There have even been a few recent buying/investment groups materializing on the market during this period already.

Remember my previous market articles this year (see: http://www.iphotocentral.com/news/article_view.php/159/150/893 , http://www.iphotocentral.com/news/article_view.php/157/148/885 , http://www.iphotocentral.com/news/article_view.php/150/141/824 ) and the admonition of Warren Buffet: "Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts…Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: 'I skate to where the puck is going to be, not to where it has been.'"