Financial Returns for Nov NYC Art Sales

Beautiful Asset Advisors (BAA), have released their analysis of the November New York City art sales. The analysis covers the Post War and Contemporary Sales and the Impressions and Modern sales. The analysis shows that the growth is in the Post War sector as it separates from Impressionist and modern returns.

The BAA analysis shows the Post War and Contemporary art sectors with an impressive compound annual yield of 16.6% return for the 40 with previous auction sales. The 31 Impressionist and Modern sales with previous auction sales showed only a compound annual yield of 5.6%.

Beautiful Asset Advisors reports on the sales

POST WAR CONTINUES TO PULL AWAY FROM IMPRESSIONIST AND MODERN FROM A TRUE RETURNS PERSPECTIVE AT MAJOR NOVEMBER 2014 NEW YORK SALES

THE POST WAR AND CONTEMPORARY (PWC) EVENING SALES PRODUCED VERY STRONG RESULTS WITH AVERAGE COMPOUND ANNUAL RETURN (CAR) OF 16.6% FOR THE 40 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 5.6%. THE DAY SALES WERE ALSO STRONG FOR PWC BUT WEAK FOR IMPMOD. IN ADDITION PWC OUTPERFORMED EQUITIES WHILE FOR IMPMOD THE OPPOSITE WAS TRUE. 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.HOWEVER BOTH CATEGORIES OUTPERFORMED INFLATION.

SUMMARY

There were thirteen day and evening post war and contemporary (PWC) and impressionist and modern (IMPMOD) sales held in New York in November. This is the high point of the fall auction season in New York and the sales generated over $2 billion dollars in sales, a record for November, 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 325
lots that sold that had prior auction histories and purchase 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 mixed. IMPMOD underperformed while PWC outperformed their historical return results for these two collecting categories. However there were more IMPMOD repeat sales which resulted in a weak combined result. The average of the compound annual returns (CAR) of all of the 325 lots that sold from their earlier auction sale any place in the world was 6.7% which is below average for 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 9.5%.

Source: Art As An Asset/Mei Moses Art Indexes/Beautiful Asset Advisors