RE FMV and Auction Comparables

After posting the Artsy article on FMV and auction comparables I received several comments on the topic. Most regarding the hypothetical and application to only the top end of the market. Others mentioned manipulations at the top end of the market has been ongoing for many many years.

Perhaps the most interesting, and by far the most in-depth response was from NYC art advisor Elisabeth Hahn who took the time to write a thoughtful and respectful response to the author of the Artsy column. Elisabeth forwarded her response to me and allowed me to post on the AW.

Please forward any additional comments on this topic to me.

Comments to the Artsy author from Elisabeth Hahn
Dear Mr. Gammon,

I read with interest your article on Artsy regarding the “fairness” of auction prices and whether appraisers can rely on them to truly be “fair” market values.  Having been involved in the art world since 1981, having worked at Christie’s for many years, and having performed many appraisals as well as having taken the USPAP courses and passing the tests a few years ago, I was very surprised and even a bit alarmed by the headline and the contents of your article.

In the same way that so many in the art world complain about sensationalist articles about the art market in the press, I feel your comments inflame an already confusing situation—to say nothing of the many thousands of appraisers in the world who may not be as skilled or knowledgeable as you clearly are.  I feel this way because your entire premise is based on an incredibly RARE situation—that of the Hockney painting—and yet you seem very comfortable imposing your warning on the entire art market and use it to call into question long-held, and often-tested methodologies used and agreed upon by all appraisers and their associations.

What happens at the very tippy top of the Contemporary art market seems to me to have little, or more often, nothing, to do with the entire remaining balance of art, furniture and decorative objects’ public auctions results.  I do not feel anyone needs to be worried about the kind of back-room, behind-the scenes shenanigans you discuss in your article, in the great majority of cases.  While the general press seems mostly to report on the highest results, the most unflattering stories, and the deepest failures of the current art world, those of us who are in the thick of it know these stories often refer to only a small part of what is actually going on.  The heated prices at the very top of the market, have never dictated specifically what everything else is worth, how we make those evaluations or what the trends necessarily are.  The behind-the scenes scenarios you invoke are unheard of in the auctions of items of lower values.  In the auction world, we were always taught “one price does not a market make.”  Every appraiser should know this too.  While I agree that at the very highest price points, many issues like this one, and others regarding guarantees, etc. should absolutely be considered, I disagree that we are at the point of questioning what the entire group of public auctions results mean when determining appraisal values.

I would have been much more interested in, and less concerned about the messages in your Artsy article if you had not used a few unusual situations to put a crucial definition of fair market value into question.  If you felt you were speaking to a general art audience, then it seems to me you have caused unnecessary alarm.  If you felt you were speaking to a more knowledgeable group of people who are in the art world and/or are in the business of appraising works of art, then I really feel you should have known better.

Thank you for taking the time to read and consider my thoughts.

With kind regards,

Elisabeth Hahn

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