While the auction houses are squeezed and buyers are paying more, sellers are seeing especially strong profits on Post-Ware and Contemporary works, according data on the recent winter auctions complied by Jianping Mei and Michael Moses of Beautiful Assets Advisors.
Compounded annual returns for Post Ware pieces sold at auction last month averaged 9.8 percent, according to Mei and Moses, compared to 5.9 percent gain for the S&P 500 over the same period of time. Some of the biggest gains came from works held around five years or less.
The unpredictability of the auctions still make for the biggest rewards, but also the biggest risk.
Last October, musician Eric Clapton sold an abstract Gerhard Richter painting for a record $34.2 million at Sotheby's in London. He'd paid $3.4 million for the work at auction just after 9/11.
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Yet, just one month later at Christie's in New York, an abstract Richter painting owned by Sac Capital founder Steve Cohen, which had been estimated to fetch $15 million, failed to sell.
Is a the sign of a top in the market for artists like Richter? Abigail Asher said no. She explained Cohen's piece was priced overly aggressively, at a point when too many Richters flooded the market.
"The Richter market is strong, it's just you have to be careful," she said, "and do your research on the value of the picture."