Valuing Your Artwork: Where marketplace, trends and passions intersect

Frank Stella, Delaware Crossing, 1961. © 2017 Frank Stella / Artists Rights Society (ARS), New York.

The art market is subject to a range of influences—artists, buyers, galleries, dealers, art experts, auction houses—that can make an artwork’s long-term worth hard to predict.

Like the stock market, the art market has evolved, particularly over the last decade. Historically the realm of an elite group of wealthy collectors, art has become more ubiquitous and available to an increasing number of buyers.

This means shifts in taste can disrupt trends, and any artist’s popularity can spike or be eclipsed. In addition, the market for the works of a particular artist or movement can suddenly become saturated, depressing prices. J.P. Morgan has broad experience working with collectors of fine art, guiding them through important decisions based on market swings and providing access to needed expertise.

Assessing market value

Generally, a specialist with significant experience in the art industry performs substantial research to determine value and, if you wish to sell, market readiness. Some of the factors that will be explored include:

  • A review of past sales, especially from the last five to 20 years, can be very informative. This review would also help provide an understanding of how stable the market may be for a given artist’s work.
  • Against this longer-term picture, recent sales from the last three to four years to help establish not only how readily the artwork might sell, but also what price range might be supported.
  • A view ahead to the next three to six months. Here you track very near-term conditions, such as the overall economic outlook, the current media environment, and what major exhibitions are upcoming.

A retrospective and a record sale

An example of how a current exhibition can create excitement for an artist is the sale of Frank Stella’s Delaware Crossing (1961). The painting sold for $13.7 million in November 2015 during the auction of A. Alfred Taubman’s collection at Sotheby’s in New York, setting a record for the artist.

Coinciding with the auction was a major retrospective of Stella’s work, the most comprehensive to date, at the new downtown location of New York’s Whitney Museum of American Art. Multiple bidders pushed the final price past its pre-sale estimate of $8–$12 million.

No absolutes

While art is largely about passion, as well as individual and collective tastes, it is impossible to determine value or predict a potential sale in absolute terms. However, looking at all the conditions surrounding such a sale, and the factors that could influence it, can certainly help narrow the universe of possible outcomes. Yet there will always be risks.

A work of art can also hold meaning for you beyond its current or expected market value. It is easier to take a clinical view when the piece doesn’t carry an emotional connection, such as having been in your family for decades.

Here again, it can be helpful to have a clear sense of the purpose of your collection. With this understanding, you can make more objective, informed choices—enabling you to weigh your affection for a particular piece against the knowledge of its value, both in the short and long terms.

To receive a copy of Your Art Collection: Financial planning for the life of your collection, co-produced with Sotheby’s, or to discuss how art ownership fits into your overall portfolio, please contact us, and a J.P. Morgan representative will be in touch with you.

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At J.P. Morgan Private Bank, we understand art as a passion, an investment and a legacy.

Whether you are a novice or serious collector, we can provide advice and insights for managing your collection as part of your overall wealth plan.