Mei Moses Looks at the IMP/MOD & PWC Sales Results

Mei Moses has analyzed the financial returns from the recent NYC Impressionist/Modern Sales and the Post War and Contemporary sales.  As well all know from the headlines the total amount of art sold was enormous along with numerous sales records for auctions and artists. The question is, did the results match up to the hype?

As always, we want to look past the headlines and see how the sales did from a financial return perspective.  Mei Moses reports the sales results were actually mixed, with the PWC evening sales being above average, the IMP/Mod evenings sales showing only average returns and the day sales lacking behind.  Mei Moses stated "the average of the compound annual returns (CAR) of all of the 299 lots that sold was 6.5% which is about 25% lower than our historical values for these combined collecting categories."

Mei Moses reports on the sales

A TALE OF NIGHT AND DAY MARKETS FROM A TRUE RETURNS PERSPECTIVE: POST WAR AND CONTEMPORARY EVENING SALES ABOVE AVERAGE RESULTS WHILE IMPRESSIONIST AND MODERN EVENING SALES ARE AVERAGE.   DAY SALES LANGUISH FOR BOTH COLLECTING CATEGORIES AT MAJOR NOVEMBER 2013 NEW YORK SALES

THE NEW YORK AUCTION ART MARKET RESPONDED TO CONTINUED GLOBAL ECONOMIC AND POLITICAL UNCERTAINTY WITH BIPOLAR RESULTS.  THE POST WAR AND CONTEMPORARY (PWC) EVENING SALES PRODUCED STRONG RESULTS WITH AVERAGE COMPOUND ANNUAL RETURNS (CAR) OF 14% FOR THE 28 LOTS WITH PRIOR AUCTION PURCHASE PRICE DATA.  IN COMPARISON THE 31 IMPRESSIONIST AND MODERN (IMPMOD) EVENING LOTS WITH PURCHASE PRICE DATA PRODUCED AN AVERAGE CAR OF 8%.  THE DAY SALES FOR BOTH CATEGORIES PRODUCED WELL BELOW AVERAGE RESULTS.

IN ADDITION PWC SLIGHTLY OUTPERFORMED EQUITIES AND IMPMOD SUBSTANTIALLY UNDER PERFORMED EQUITIES.  THIS ASSUMES THE EQUITY RETURNS WERE BASED ON INVESTING SIMILAR SUMS IN THE S&P 500 TOTAL RETURN INDEX FOR THE SAME HOLDING PERIOD AS EACH ART OBJECT. ©    

SUMMARY

There were ten day and evening post war and contemporary and impressionist and modern sales held in New York in November.  This is the high point of the fall auction season in New York and the sales generated almost $2 billion dollars in sales at the two auction houses we cover in our analysis; Sotheby’s and Christie’s.  The sales have been reported in the press as having results for total sales or percent sold that ranged from spectacular to fair.  We found 299 lots that sold that had prior auction prices that we could find which allow us to compute a true return for each of these objects.  From a financial returns perspective of the holders of the art that sold the results were slightly below historical return results for these two collecting categories.  The average of the compound annual returns (CAR) of all of the 299 lots that sold was 6.5% which is about 25% lower than our historical values for these combined collecting categories. In addition on a combined basis these returns were well below the returns that would have been achieved if the value of the art purchases had been invested instead in the S&P 500 Total Return index (where dividends are reinvested tax free) for the identical holding periods as the art. The average CAR for the S&P investments would have been 8.5.

Source: Beautiful Asset Advisors/Mei Moses Fine Art Index