Speculative ‘fever’ for works of young artists breaks

DEMAND for abstract paintings by artist Lucien Smith was so strong two years ago that art adviser Mia Romanik sold a dozen of his works in one month. She’s not getting any requests now.

“They are certainly not trading as they once did,” said Romanik, who is based in Los Angeles.

Smith, 26, is a prominent casualty of the decline in the speculative market for young artists whose prices had been surging just a year ago. Now sellers are trying to offload works at auction amid volatile financial markets. The Standard & Poor’s 500 index is down 10 percent since May 21, when it hit a high for the year.

Contemporary art auctions at Christie’s, Sotheby’s and Phillips in New York fell 26 percent to $33 million (R455m) in September from $44.8m during the same sales last year as a third of lots failed to sell. Just 63 percent of artworks created in the past four years found buyers, 22 percent less than last year, according to research by Artnet Analytics.

“The era in which you could buy something for $3 000 and sell it for $100 000 a month later is fully over,” Bill Powers, whose Half Gallery held Smith’s solo debut in New York in 2012, said. “And rightly so. That was unsustainable exuberance.”

Overproduction by artists and overexposure were among the causes of the slump. – Bloomberg