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Art Price Facts, Fallacies,

Fantasies & Adventures



We're in uncertain economic times at the moment, so for anyone who may be in search of sober art market assessments, especially as relate to how much art may or may not be worth at any given moment, here's some realistic skinny on how to better understand the perpetual rollercoaster ride of art prices... the ups, downs, side-wayses, and more.

The following list is kinda long and in no particular order, so start wherever you want, take it in bite-sized bits if necessary, and of course, enjoy the adventure. If you have anything to add, edit, revise, question, or otherwise respond to, you are welcome to contact me here or msg or comment on any of my social media pages. As always, thank you for your support!

* For those of you who haven't been around the art world all that long, art prices do not only go up. They also go down. They can go up or down for a variety of reasons including but not limited to the health of the economy, events in artists' lives, rumors or gossip, prevailing tastes, notably high or low auction sales results, media attention, what is or is not in fashion, changes in gallery representation, and much more.

* There are no set rules governing art prices. Because the art market is largely unregulated, anyone can put any selling price on any work of art for whatever reason they feel like as long as they do not violate any laws in the process. Outside of legal settings perhaps, no seller is under any obligation to prove, justify, discuss, substantiate, or otherwise demonstrate that the art they're selling is worth what they're asking for it (though in many cases it's a good idea to do so, especially if a possible sale is involved). In other words, they can say whatever they feel like saying and that's that.

* Depending on the circumstances, there are a variety of ways to figure out whether an asking price is fair or reasonable, or whether it's too high or too low. For example, many artists' selling prices are searchable online. Online price information may include auction sales results, asking prices at retail galleries or art websites, prices on artists' websites or social media pages, etc. This price information can give considerable insight into an artist's past and current sales history.

* It is entirely reasonable for any prospective buyer to ask any seller how they determined their asking price... and receive a fact-based answer in return.

* In the established conventional art world, sellers set prices according to verifiable facts including number of past sales, regularity of sales, recency of sales, sales for comparable works to the art that's being sold, an artist's exhibition history, awards and distinctions, costs of materials, time it takes to make the art, availability and demand for the art, etc. Prospective buyers deserve to know what criteria art prices are based on and how they factor into determining final prices.

* In the conventional art world, an artist's prices generally become more stable as they advance in their career, their accomplishments and distinctions and awards increase, they regularly show and sell, and various other forms of art world recognition and critical acknowledgement accumulate.

* In the conventional art world, a successful artist's selling prices generally increase over time, and often parallel consistent and cumulative track records of noteworthy shows, sales, successes, and accomplishments.

* In the online art world, conventional standards of measure such as those mentioned above may or may not be present. Aspects of successful artists that are often present include large numbers of followers, significant numbers of influential followers, posts with lots of likes, lots of shares, large numbers of comments, evidence of regular online sales either at galleries or artist-direct to buyers, regular features or interviews or profiles by significant art websites/podcasts, and more.

* Isolated high or record sales of an artist's art do not necessarily mean that's how much all of the artist's art is worth. A steady stream of documented sales records for an artist's art within consistent price ranges is generally a more accurate measure of value.

* In order to understand any unusually high selling price, factors that need to be researched include the circumstances of the sale, the identities of the buyer and/or seller, how public or private the sale was, if or whether hype or publicity influenced the selling price, how knowledgeable or significant the buyer was, how the art was represented by the seller, whether there was something special about the art, and so on. These must always be taken into consideration when attempting to determine the significance or effect of that price on the overall market for the art.

* Significant auction houses tend to select art for sale that they believe will sell well, and avoid art that my not. They want their sales to give the impression that art they sell is increasing in value. They want art their art to sell for at or above presale estimates, or in best case scenarios, set record prices... and not the opposite.

* Strong sales not only make auction houses look good, but they also make the art market look good. They also give the art media something to write about (which also means good publicity for them). Strong sales encourage more sellers to consign quality art to future sales.

* Significant auction houses do what they can to avoid offering art that might sell below presale estimates or fail to sell at all. Poor auction sales results do not reflect well on an auction house's ability to sell. Sellers are less inclined to consign art to auction houses if negative sales results are too often the case.

* In general, significant auction houses want to maximize positive outcomes and avoid negative ones by thoroughly researching the markets for the art they sell before accepting it for sale. They are highly vested in not only making the art market look strong but also in making themselves look good, and do what they can to stack the odds of those things happening in their favors.

* Sales results from significant auction sales at significant auction houses are not necessarily indications of how weak or healthy the current art market might be. Nor are they indications that all art goes up in value.

* What someone thinks or feels about an artwork like how attached they are to it, how much they love it, how much it means to them, how it effects them emotionally, how much sentimental value it has, and similar sentiments cannot be physically measured or quantified. In other words, they are not facts and have little to do with determining how much a work of art might be priced for sale or be worth on the open market.

* Other unquantifiable factors include hype, current popularity, what's in fashion at the moment, excitement over an artist, anticipation, predictions, rumor, gossip, or "word on the street." Qualities that can't be directly measured generally have little or no direct connection or relation to dollar values. However, buyers may at times pay premium prices for art based on such factors.

* Sales of art to people an artist already knows such as family members, longtime friends, and associates are not necessarily indications of what that art may be worth on the open market. People who know and love an artist are generally more inclined to pay higher prices based on their love or relationships to the artist, and do not necessarily put as much emphasis on research and market data as impartial outside buyers might.

* Informed buyers who are not familiar with an artist but who like their art enough to consider buying it are businesslike about buying, tend to research the artist's career and sales history in advance, and make objective dispassionate decisions about whether or not to buy.

* Consistent track records of sales to buyers outside of an artist's circle of friends, relatives and associates are the most accurate indicators of the art's overall market value. The difference being that buyers outside of an artist's circle buy based on merits of the art alone rather than on how they might feel about the artist personally. Buyers within an artist's circle, however, often buy based on affinity for the artist rather than on merits of the art itself.

* Retail art prices at galleries are not what the art is worth. They are what galleries would like to sell their art for. How much the art actually sells for is not necessarily what the art is worth either. It is only how much the gallery is able to sell it for.

* Whether or not a gallery's retail prices are public, how much they end up selling their art for is often private.

* Retail gallery prices and selling prices are not necessarily the same. In fact, there can sometimes be significant differences between the two.

* Particularly with artist markets that are tightly controlled by only one or several galleries or individuals, only privileged parties may know what their art actually sells for. And only privileged parties may be able to sell the art at those prices, not anyone who happens to own art by the artists.

* The reliability of a source of price information must always be taken into consideration when attempting to determine the relevance or accuracy of what they say. This often has to do with whether an information source has a personal interest or investment in any art or artists they are commenting on, especially the prospect of financial gain.

* Private art owners cannot automatically resell their art at the same prices they paid for it at galleries or from artists, or at prices galleries or artists currently sell it for. In a significant percentage of cases, private owners may only be able to resell for fractions of what they paid for their art at galleries or directly from artists.

* Galleries can typically sell art for more than private owners can because they offer amenities that private owners can't. The same is basically true for artists. Amenities may include providing proof of purchase and/or authenticity, updated appraisals or valuations or price information or assistance to appraisers, professional packing and shipping, return or exchange policies or guarantees, providing regular updates on artists' careers, providing personal access to artists, and more.

* How much a work of art might be insured for is not necessarily an indication of how much that art can be sold for on the open market. Appraised insurance value is typically what it would cost to replace a work of art with a comparable or identical work should the original be lost, stolen, damaged, or destroyed. The best measure of insurance value is what a comparable work might cost if purchased at full retail directly from a gallery that represents the artist, or from the artist themself.

* In the conventional art world, a work of art's value is generally based on documented quantifiable facts about that art such as its exhibition history, physical characteristics such as size or medium or complexity, its overall physical condition, scholarly assessments of how it compares in significance to other works by the artist, how significant it is in relation to the evolution of the artist's career, how in-demand it is when compared to other works by the artist, and so on.

* A typical artist's price structure is usually consistent and not subject to wild swings in any direction. There are exceptions to this, but even wild swings generally settle down and again become steady and consistent once the marketplace understands and responds to whatever triggered the swing in the first place.

* Art price increases are generally based on the trajectory of an artist's accomplishments over significant periods of time, not brief periods of time.

* If an artist's art suddenly goes up in value, especially over a short period of time, there is no guarantee that those new high prices will stay that high. There is also no guarantee that those prices will continue to rise at that rate, or that they won't decline as fast as they rose.

* Sudden publicity, media attention, isolated high auction prices, and other forms of marketplace exposure over short periods of time are not generally good reasons for sudden price increases, although price spikes are not uncommon in these types of situations. Consistent or regular publicity or media attention over long periods of time does generally correlate with steadily increasing prices.

* If an artist's prices go too high too fast, the possibility always exists that the market for their art can be compromised. Reasons for this may include that fewer buyers can afford the art, new buyers get priced out of the market, existing owners drop out of the market glad that they bought when prices were low, and buyers who bought low putting their art back on the market in hopes of selling high. The risk here is that decreased demand and increased supply may begin to weaken the market for the artist, correct it to a certain extent, or in worst case scenarios, collapse it altogether due to lack of active buyers.

* An artist whose prices get too high too fast is often under serious pressure to keep producing works as good or better than those that initiated the increase in the first place. This pressure not only originates from within but also from marketplace expectations, for all new work to sell at prices at least as high and preferably higher than its immediate predecessors. On the downside, even one subpar show, either with lackluster sales or poor reviews or negative gossip, has the potential to soften or put downward pressure on prices.

* Art prices often respond to economic conditions. In strong economies when more people have more money to spend on discretionary purchases, demand for art increases. In weak or soft economies, the opposite is more likely to happen.

* The belief among some that art prices must always go up and can never go down is not true. As with many other commodities, art prices can fluctuate. In weak economies where demand may decrease, sellers may have to lower prices or become more flexible about how much they're willing to sell for. Likewise in strong economies, raising prices can be equally justified in response to increased demand. People who are knowledgeable about how the art market works understand and accept these types of ups and downs.

* Art prices are typically not based on speculation or predictions of what may or may not come to pass in the future. What has already happened and what's happening now are far more reliable indicators than what anyone might think may happen in the future.

***

Need help pricing your art or have questions about how you're pricing it? Make a consulting appointment. A half-hour for $90 will do it for the overwhelming majority of artists. I'll review your art and background information and make specific recommendations on how to price and more importantly, how to explain your prices to anyone who askes in ways they can understand and appreciate. You are always welcome to contact me here.

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(sculpture by Patricia Piccinini)

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