A comprehensive guide to the things that can affect the price of an artwork and how.
by A. Richard Langley
Collecting art, like creating it, is also an art in itself. It is a continually evolving process and the more time you spend doing it, the more experienced and knowledgeable you become of your own interests. As your collection grows, you gain expertise in acquiring works that reflect your taste and passion.
Whether you’re a serious or a casual collector, investing your time and money is an important part of building a collection. Although a great commodity in terms of investment, original art does not come cheap. Therefore, it is always a good idea to have some prior knowledge of the market as well as the art that you are purchasing. That mixed with your experience as a collector can help you put the correct number on an artwork. In order to determine the approximate value of a particular piece, you have to be nimble to navigate the volatile market, the always-changing trends, and shifting personal tastes.
The art business is unregulated and unpredictable. It is important that you are aware of some guidelines to help you determine fair market values and art prices using the most accurate, up-to-date information. Here is a comprehensive guide to the things that can affect the price of an artwork and how.
No matter from whom or where you buy a piece – artist, gallery, or online – the most important thing is to make sure it is authentic.
The condition and quality of a piece should properly reflect its age and status. Newer pieces should be in pristine condition, while older works, much like a piece of antique furniture, should show signs of normal wear and tear – with no changes in appearance or structure.
Any kind of damage to an artwork usually depreciates its value or can even completely take it off the market. In 2006, Las Vegas magnate Steve Wynn accidentally poked his elbow through his prized piece, Picasso’s Le Rêve, voiding a contract for its lucrative sale. However, sometimes damage can actually be a good thing, too! For instance, when actor/director Dennis Hopper accidentally shot his Warhol portrait of Mao Zedong twice, the work sold for more than 10 times its high estimate after Hopper died. Therefore, in such situations, it is always better to consult a professional.
It is not uncommon for works of art, especially old works, to go under restoration once in a while. This does not make them a bad investment. As long as they are in a good condition and no permanent damage has been done, the work will continue to appreciate in value as time passes. If you plan to purchase a restored or repaired work, you should address the key items below.
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Provenance is the sales and acquisition history of a piece. It may not always affect the piece’s price but could contain valuable, interesting information. You may learn an anecdote about the artist or that the piece once belonged to an important, influential person. Mainly, however, provenance is used to establish authenticity and lawful ownership.
Interest in an artist and their works can vary greatly across the periods, subjects, volume, and market trends. Pieces from established, in-demand artists – dead or alive – like Andy Warhol and Damien Hirst, generally hold their value and public interest. Some rising stars occasionally make a lasting and high-priced first impression. There are also times when an average artist’s work may hike up due to a renewed interest. For example, in 1988 Jasper John’s False Start was sold for a record-breaking $17 million because of an engaging bidding contest at a Sotheby’s auction.
No matter your finances or interests, it is crucial that you follow the market to stay current on the works and sales of artists you collect.
Size is one of the key factors in pricing art. Generally, the bigger the piece, the more expensive it is—especially for established artists (e.g., Jeff Koons’ Orange Balloon Dog). For pieces that have been sold before, whether at a gallery or at an auction, use price databases (and, if necessary, consult an appraiser or advisor) to compare recent prices of similarly sized works and for similar works by the same artist.
Other factors that can affect demand and price of an artwork include whether the work is a painting or a drawing, an original, or an edition, and its subject, medium, and movement. Even the material used in the creation of the artwork, for example, Damien Hirst’s For The Love Of Gold (a skull covered with diamonds), can make a huge difference to its final value.
It’s human nature to want to own a unique piece, which is probably why original art holds so much value. The rarity of an artwork – the only few works left after a particular artist’s death, or the last few limited edition pieces – can drive up its price. This, along with the added market value of the artist can also cause the price of an artwork to significantly appreciate in value. For example, a limited edition print by a noted artist of the past may be worth more than some originals by noted contemporary artists.
The art market, like the stock market, is fickle and unpredictable. There are several factors – financial as well as social – that can impact it and shift the balance. Consider the following elements to help you through the process. Remember to consult with your appraiser or advisor if you aren’t confident in self-appraising.
You may like an artist’s works during a certain period, but be sure the piece you want is a good investment. It should be unique for the artist’s output during the period and should stand out from their works in other periods.
Below are some elements that can adversely affect the price of period-particular works:
The right appraiser or advisor will give you an objective opinion on the piece you want and have no conflict of interest. They should belong to recognized art market expert associations, and be versed in the art, periods, or artists that you collect.
Even if you’re a confident self-appraiser, you should consult with a professional to address the following items.
You may be passionate about art, but always remember that it’s a business too. Regardless of whether you keep or sell the art you collect, you need to keep current and have an objective opinion on the art market specifics about the artists and works that interest you.
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