‘Urban Art’ Market Rides Out the Recession
Move over Monet. Artists with street credibility are increasingly dominating the contemporary art market, with the cool factor turning works of graffiti into sought-after investments worth thousands of dollars.
Once the preserve of celebrities who could afford the price tag, the "urban" or "street" art market has survived a downturn and is booming as it attracts more and more investors to the new generation of "underground" artists and their work, according to art experts.
Indeed, art galleries and auction houses in New York and London are reporting an increase in investor interest – particularly at the high end of the market – as both established and new artists vie with the old masters for investors' attention.
On Monday, the UK-based auction house Bonhams, well known as one of the world's oldest and largest auctioneers of fine art and antiques, held its first ever urban art auction in Los Angeles on Monday, with 82 lots of British and American urban artists.
It expected the auction to fetch at least $1 million after successful sales and high demand earlier in London.
Alan Montgomery, contemporary art specialist at Bonhams, said the inaugural sale had gone well with strong prices for some of the American artists, including a couple of world records.
"Overall we were pleased with the fact we sold most of the works...It will obviously take time to establish the 'Urban Art' auctions in the USA, but we see this as a strong base to start from."
"The Banksy prints performed very well, and we got strong prices for some of the American artists including a couple of world records. We are looking forward to our next Urban Art sale in London in April 2013."
He told CNBC that the market had bounced back from recession.
"Urban art relay exploded in 2006 and 2007 and then a year later it got pretty tough and people thought it was finished - but it's really bounced back over the last couple of years as new faces enter the scene and established artists become widely recognized."
"Now, there is an international market for these artists," he said.
Montgomery notes that since museum exhibitions and galleries have started to focus on contemporary and "urban" artists, urban art investment has acquired a certain gravitas.
"What we have found is that contemporary investors are now buying urban art – for example, 1980s New York graffiti pieces that are being looked at with an academic perspective now."
Multi-Million Dollar Graffiti
U.S. artists Shepard Fairey is one of the more famous artists who started his career as a so-called graffiti "street artist".Currently exhibiting in central London, his works sell in galleries for thousands of dollars on both sides of the Atlantic.
After achieving international recognition with his President Obama "Hope" portrait that became synonymous with the 2008 presidential campaign, the "Fairey phenomenon" has also found appeal among new investors.
His latest works are for sale online with prices starting at $35.
Britain's most famous (or infamous) urban art export — Banksy — has gone from daubing sidewalks and walls in British cities to counting celebrities such as singer Christina Aguilera and actor Jude Law among his fanclub.
Angelina Jolie and Brad Pitt famously spent $1 million on his work after "discovering" it at an L.A. art auction.
"Urban art really captured the public's imagination," Montgomery said.
"People like Banksy and Shepherd Fairey are so well-known, any person on the street would know their names and the funny, striking images they employ appeal to investors.
Banksy has become well known in the U.S. after his Academy Award nomination [for his debut feature film entitled Exit Through the Gift Shop] and people take this work seriously."
Indeed, Bonhams plans to sell some of Banksy's work at Monday's auction with pieces such as "Rude Copper" , "Gangsta Rat" or "Heavy Weaponry" (rats, policemen and the military are recurring motifs in Banksy's work) expected to fetch up to $150,000.
The more traditional collector that might be found at a Bonhams auction house might not be put off urban art as expected.
According to Sarah Ryan, founder of New Blood Art, a company that discovers and sells artists' work, "street art" was finding acceptability among modern art collectors.
"There's a wider range of collectors of "street art" collectors than there might have been a while ago – particularly among collectors that might have had a more traditional bias. The style of Banksy, for example, has become wider-reaching and more acceptable as an art- form, particularly in the main-stream."
Proceed With Caution
Urban art store Art Republic has several galleries selling hundreds of signed artworks to the public and collectors.
However, chief executive Lawrence Alkin told CNBC that investors should proceed with caution when buying into the urban art movement.
"Yes, the top guys like Banksy, Shepard Fairey, Mr.Brainwash and D*Face are all doing well and they are very sought after, their shows sell out quickly –I think Shephard Fairey's recent sale easily grossed a million dollars" Alkin said.
"Though there are artists like Static who are relatively new and are doing very well, you've got to be careful about what you invest in. A lot of artists came onto the urban art scene after the successes of Banksy and Fairey and then they quickly disappeared. It's only certain minor artists that are doing well now."