May 8, 2024 - Economy

What art auction prices don't tell you

Animated illustration of an ornate frame with falling dollar signs

Illustration: Eniola Odetunde/Axios

Auction prices are the most transparent and reliable way to find out the value of an artist's work. But as Katya Kazakina reports for Artnet, they can also be highly misleading.

Why it matters: In general, auction prices tend to overstate the strength of the art market, thanks to survivorship bias — how auction houses gravitate toward the hottest artists. Sometimes, however, the bias can lean the other way.

Driving the news: Kazakina notes that while artist Sterling Ruby's newest works are selling for $550,000 each, one of his more celebrated earlier paintings is coming up for auction with an estimate of $250,000 to $350,000, and in general Ruby's auction prices have been disappointingly low over the past couple of years.

By the numbers: Ruby's auction record of $1.8 million was set in May 2013. That's more than all 39 Ruby works that were sold at auction in 2023, combined.

  • Ruby's most recent item to come up for auction, a sculpture called "Snake," failed to sell at Phillips in London even at a low estimate of £15,000 ($18,000).

Between the lines: While most works consigned to auction come as a result of the "three Ds" (death, debt, divorce), a lot of Sterling Ruby pieces are simply unwanted.

  • They're what Kazakina groups as "ashtrays, collages, and resin sculptures" — lesser works that were bought by collectors not because they particularly wanted them, but because they understood that buying such pieces was necessary if they wanted to be able to buy one of Ruby's in-demand paintings.
  • When Ruby moved galleries, however, as he did many times, all the goodwill earned by buying smaller works was worth nothing, and those pieces ended up at auction.

The bottom line: Artists and their dealers are understandably focused on the primary market — where both of them make money. That can remain healthy even when the secondary market is very weak.

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