Auction and Guarantee Market Performance
Spring 2019, 2020, 2021: Christie’s, Phillips & Sotheby’s
Artnet News declared the golden age of guarantees over in late 2019, following downward trends of hammer prices for third party and house backed guarantees in 2017 and through 2018. While the aftermath of the pandemic and subsequent cancellations and postponements of auctions in the months that have followed skew how this proclamation may have played out in a normal year, the consistency of hammered guaranteed works in the first quarter of 2021 show promise for the solidification of the behind-the-scenes transactions that are auction guarantees.
In the first quarter of 2021, third party and in house guaranteed works accounted for over $148 million in sales with the buyer’s premium at auction, roughly 20 percent of all sale totals completed in 2021 so far. This is on track with both 2019 and 2020, which had respective quarter one guarantee sales of 18 and 22 percent of total sales’ hammers with the buyer’s premium. The first quarter of 2021 comes after a year of turbulence in the art world, but the continued establishment of the role of guaranteed works at auction, even during these unprecedented times, signal that this is still a consistent area of the market.
The first two quarters of 2020, which coincided with the COVID-19 pandemic outbreak, resulted in lower total sales at auction for Sotheby’s, Christie’s, and Phillips. Total sales with the buyer’s premium were just over $1 billion. This was about equal to the total sales for quarter one of 2019 alone. Yet, the percentage of sales that came from guaranteed works was substantially higher in 2020 than the previous year. Guaranteed works in the second quarter of 2019 increased to just 33 percent of total hammer sales with the buyer’s premium from the initial 18 percent on quarter one. In the second quarter of 2020, they accounted for 45 percent, a 23 percent increase.
Between 2019 and 2020, inventory among many of the highest selling auction departments, including Post-War, Contemporary, Impressionist, and Modern, dropped substantially. Hammered lots from these categories’ respective auctions at Christie’s, Sotheby’s, and Phillips, totaled over 17 thousand in 2019. In 2020, during the height of the pandemic, this number fell to just over eight thousand. Guarantees made up 5.04 percent of the total lots sold in 2019 and 4.45 percent in 2020. Despite the drop in inventory in these areas due to postponements and other unforeseen circumstances relating to the pandemic, the guarantee’s place in the auctions that remained was relatively constant.
Among the third party guaranteed lots sold in quarter one of 2021 are Jean-Michel Basquiat’s Warrior, offered in a single lot auction, and his Self Portrait from Christie’s 20th Century Evening Sale. At the hammer, Warrior became the most expensive Western work of art sold at auction in Asia and Self Portrait sold for more than double its low estimate. Others that were guaranteed (and sold) include two René Magrittes presented at Christie’s The Art of the Surreal, Le grande marée and La découverte du feu. Le grande marée sold with the buyer’s premium for over three times its low estimate of £650 thousand.
The 2019 Artnet article concluded that “moving forward, the guarantee business may return to the smaller club of solid, seasoned players with a deep knowledge of the market.” Those guaranteeing lots, other than the houses themselves, are not captured in this data. Regardless of if this claim is true today, it has not had the intended effect on the market for the guarantee, whose golden age may now instead be returning as 2021 continues.
With inventory down in 2020, the art market as a whole faced global sales of art and antiquities 22 percent below those of 2019. The first quarter of 2021 for Christie’s, Sotheby’s, and Phillips saw a total hammer of $617 million. Hammer sales are slowly beginning to return to the levels of pre-pandemic 2019. In 2020, hammered lots fell from 570 million in quarter one to 517 million in quarter two as the pandemic progressed around the world. Its slow rise since then signals that quarter two of 2021, in an art market now more accustomed to online sales and optimistic about the progression of post-vaccine reopenings, will continue on this upward trend as the auction season continues.
