Lower estimates in spring art auctions

Facing a still uncertain economy, the world's two leading auction houses head into their busy spring auction season with fewer artworks to sell and lower estimates than in previous years. But the picture isn't entirely grim. Both Sotheby's and Christie's are featuring unusual pieces in May that haven't been on the market for decades. And even though many wealthy collectors have been hammered by the recession, there are still plenty of investors and art museums with the resources to spend millions of dollars on art.

"Sotheby's and Christie's have done a very good job of getting property consigned at realistic estimates" considering current market conditions, said David Nash of the Manhattan art gallery Mitchell-Innes & Nash and an expert in impressionist and modern art. "They've edited these sales quite well, and kept them short."

Reserved for best merchandise
On May 5, Sotheby's is offering 36 impressionist and modern works in an evening sale that is traditionally reserved for its best merchandise. The sale is expected to bring up to $118.8 million, compared to last spring when 52 lots sold for $235.4 million. Sotheby's contemporary evening sale on May 12 has 49 lots and is expected to bring as much as $72.7 million. In 2008, $362 million was realized for 83 contemporary works.

Christie's has 50 lots at its evening sale on May 6, which it expects will bring $94 million. Last spring it had 58 works, and realized $277.2 million for 44 sold lots. For its contemporary evening sale on May 13, it expects to achieve up to $104 million, compared to $331.4 million last spring.

Both houses are offering exceptional works by Pablo Picasso, Alberto Giacometti, Max Ernst, Piet Mondrian and David Hockney, but there are fewer star quality works because "sellers are reluctant to sell to this market because they don't think they will get the best price," Nash said. Sotheby's president, Bill Ruprecht, acknowledged that the shortage of works coming to market was affecting the business. "That does not mean there aren't material transactions happening," he said. "That just means that there are many fewer transactions because there's still more a sense of disquiet and inconsistency between what buyers want and what sellers want." "It continues to be a watchful environment," added Christie's Americas president, Marc Porter. "We have tried very hard to use estimates that are as reflective of the market as possible. ... For some fields, we will discover that we need to further refine estimates."

Both houses have virtually done away with guarantees Ğ the sum promised to sellers whether their works sell or not and an enticing tool auctioneers use to secure the highest quality consignments.

"Guarantees need market predictability, which we don't have now," Porter said.

But the economy has not left wealthy buyers and sellers shaken and without resources, as some believe. "They're sitting with cash and assets and for the most part are not forced to sell," Porter said. Many hedge fund and private equity managers, who have been some of the biggest buyers of record-breaking artworks in recent years Ğ remain in the picture.

"There's still a Forbes 400 list," he said.

While few world records are expected to be set at the upcoming auctions, both houses are offering works that boast impeccable provenance and that are fresh to the market. Christie's has a 1971 Picasso, "Woman With Hat," belonging to film director Julian Schnabel, who has consigned it to help finance a real estate project.

At Sotheby's, an important Giacometti work, "The Cat" Ğ estimated at $16 million to $24 million Ğ was last seen at auction in 1975.