Mei Moses Review of the London ImpMod Sales

The other week Sotheby's and Christie's each held several sales from the Impressionist Modern art sector in London. The reported sales results appeared to be strong on the surface, but it is always good to review the underlying fundamentals of these sales for a stronger interpretation of market confidence.

Recently Mei Moses/Beautiful Asset Advisors have been releasing market analysis and update reports on the major sales. Mei Moses compares the results based on repeat sales and a calculated compound annual return against other financial indexes such as the Standard and Poors 500 in order to determine long term returns of art as an asset class. As reported by Mei Moses, the returns from ImpMod sector continue to be strong.

This report also has some very interesting analysis of art from the ImpMod sales that did not sell. The report computed the CAR return from a previous sale and then compared to the pre sale estimate. This analysis is very interesting and should be important to appraisers while offering some insight into the viability of auction house pre sale estimates.

FYI, Mei Moses is still offering a 50% discount to a full one year subscription. The site offers much for the fine art appraiser, and if you use quantative analysis in your market reports, the BAA site content is a must have. Click HERE for more information on the BAA offer.

The two June evening sales have been reported in the press as   being quite successful with strong total sales and with an impressive 90% of the lots sold.  From a financial returns perspective of the holders of the art that sold the results were also quite strong.  We have repeat sale data on 1/4 of the lots that sold and the average of their compound annual returns (CAR) of these 29 lots was a strong 11.1% with an average holding period of 17.2 years. This strength is documented when these returns are compared to the returns that would have been achieved if the art purchasers had invested instead in the S&P 500 Total Return index (where dividends are reinvested tax free) for the same holding dates as the art.   The average CAR for the S&P investments would have been only 6.8%. 

At Sotheby’s May 2011 evening sale of impressionist and modern 15 lots sold that had a prior auction price that we could find.  The average of the compound annual returns (CAR) of these lots was 11 % and the average time between auctions was about 16 years. In June 2011 there were 13 such lots with an average CAR of 10.7% and an average time between auction sales of 19.8 years.  It is also interesting to note that none of these lots had a negative return.

The highest priced lot for which we had a prior auction price, Alberto Giacometti TROIS HOMMES QUI MARCHENT II, sold for almost $17.2 million.  It had also sold in 1988 and yielded a CAR, before transaction costs, of 9.4% over the 23 year holding period.   However the highest CAR for the evening was the 24.9% achieved by Tamara de Lempicka LA DORMEUSE which sold for almost $6.6 million and had appeared on the market 14 years earlier when it was purchased for $291,500.

At Christie’s May 2011 evening sale of impressionist and modern paintings 16 lots sold that had a prior auction price that we could find. The average of the CAR of these lots was 11.3 % and the average time between auctions was about 15 years.  In June 2011 there were 15 such lots, with an average CAR of 11.4% and an average time between auction sales of 15 years.  It is also interesting to note that only two of these lots had negative returns (CAR of -0.6 and -5.4%).

Click HERE to read the full Mei Moses press release on the June London ImpMod sales.

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