Sunday, January 28, 2024

Establishing the Value of a Work of Art

What prompted this thought was twofold. First the question from a lawyer about how works of art were priced and then a story about Hunter Biden’s art sales.

As you have probably read Hunter Biden is an artist and he has gallery representation. Some of his paintings have been priced in the hundreds of thousands of dollars. Crazy prices for an artist whose only claim to celebrity is being the son of a president. But wait a minute, is that crazy? Examples of lathe turning that have been associated with the daughters of Louis XV whom he instructed in this hobby have been highly valued. In the past, I have bought and sold works with royal associations for a premium, and I would pay a premium for an object that belonged to JFK!

In this day and age, artists are usually introduced to the world by a dealer who believes in their art and works to get their creations into private collections then to exhibitions, and finally to museums. With each success, their work will increase in price. At some point, it will come to the auction houses’ attention where a guess, called an estimate, will be made of what the work might bring if there is more than one person who would like to acquire it. Through the process, an artist will become more and more “established”. At that point one would be able to find a basis of comparison and, depending on the quality of the example, establish a price range. Daniel-Henry Kahnweiler a German-born art collector who became a major French art dealer and was a champion of the cubist movement represented artists such as Pablo Picasso and Georges Braque.

A gallery in Melbourne Australia called Art & Collectors has a publication in which they came up with another definition of an established artist. “Established artists have hit icon status. They have exhibited extensively nationally or internationally in reputable institutions, been written about, and entered the cultural discourse. At auction, their status is reaffirmed by consistently high bids.”

Dealers often speak of clients who buy with their ears, not with their eyes. Astute collectors first use their eyes and then listen to the story. If the work has been owned by a collector renowned for his knowledge and taste that aids us in believing that it is worth the bid or asking price.

Every once in a while, you hear about a price at auction that has nothing to do with the usual prices for the artist’s work. This can be caused by a “disease” called auction fever, and one must be careful not to catch it. One can get so caught up in the moment trying to prove yourself by outbidding a rival. It may turn out you are bidding against the house, or an arrangement made between the owner and auction house.

Of course, if you have a work of art with a legendary name like Monet, you can decide what you think the price should be by looking up prices his work has brought and where this example might fit in his oeuvre. However, if you are speaking of Leonardo or Vermeer where there are a limited number of accepted works the price can go as high as the market will bear. How would one value the last remaining Vermeer in private hands, “Young Woman Seated at a Virginal” belonging to Thomas and Daphne Kaplan in their Leiden collection.

Sometimes a work of art hits the taste of the moment and brings a huge price at an auction but then later very little, as tastes change. Do your research and unless you are a gambler, never buy art as an investment. The art market is far more fickle than the stock market.

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