As the bear market stumbles through its third year -- and the real-estate bubble threatens to pop -- at least one market is chugging along: contemporary art. Last week's auctions were more eagerly anticipated than 1999's Red Hat IPO -- the Wall Street Journal even took a contrarian position by shorting the market, predicting a 10 to 15 percent drop in prices.
Much to the delight of the stone-faced dealers and women in fur-collared coats (despite the unseasonable warmth), prices held. Last Monday, Phillips disposed of nearly $25 million in art. On Tuesday, spectators piled six-deep in the back of Sotheby's football-field-size sale room, where mostly postwar works sold close to the low end of some aggressive estimates. "There's a magic number at the end of all this," teased auctioneer Tobias Meyer, coaxing the evening's prized de Kooning toward $12 million. "Let's try one more."
But on Wednesday, Christie's had a blowout, with record prices for a number of living artists. "They win!" cried an excited onlooker.
Contemporary sales approached the marquee Impressionist sales of the week before. "You're seeing a merging of price points between Impressionists, modern, and contemporary," said Laura Paulson, Sotheby's head of contemporary art. "The Impressionist market is not sexy," added Josh Baer of art newsletter The Baer Faxt.
"Who's the next Picasso?" asked Christie's Amy Cappellazzo, confident of the answer. "Warhol." Sure enough, Andy's Big Electric Chair went for $4.5 million. (If Warhol is the new Picasso, then Jeff Koons is the new Warhol.) Meanwhile, California's Wayne Thiebaud, once thought of as a "regional" artist, set a record at $2.8 million, more than a de Kooning went for. "When a market gets a bit hot, it pulls up artists like Thiebaud," said one aficionado. "For people with too much money, he's the anti-Warhol."
The contemporary market may be sexy, but it's not without risk -- even when it comes to a Warhol. Art prices are always a function of scarcity, and Warhols have flooded the market (57 were on sale last week alone), especially his "Flowers" paintings. Problem is, no one knows how many more are still lurking out there. Warhol's catalogue raisonné hasn't covered that period yet. "When it comes out," says one auction official, "we'll all be in for a shock."