The Picture Worth $106.5 Million—What Recession?
Business + Economy

The Picture Worth $106.5 Million—What Recession?

The art market declared the Great Recession over when a Picasso painting brought the  highest price ever at auction

Ian Cuttler for Christie's Images 2010

After soaring into an era of record sales earlier in the decade, the lofty art market came crashing down to earth in the summer of 2008–if briefly-- yet another victim of the Great Recession. In 2009, sales for Christie’s, one of the premier auction houses in the U.S. along with Sotheby’s, dropped 35 percent to $3.3 billion as investors hoarded cash as a hedge against a further economic  downturn.

Fast forward to 2010 and suddenly collectors are spending Big Money for great works of art. Exhibit A: Tuesday’s record auction price of $106.5 million for Picasso’s “Nude, Green Leaves and Bust” – a work that was created over the course of just a single day in 1932.

The huge sale is the crowning moment of an art market that has finally come out its recession-induced coma.   What’s in store for 2010? “Thus far, it’s been great,” says Conor Jordan, the head of impressionist and modern art at Christie's in New York. “The February sales in London were super strong. The buyers were there at the very topmost levels … And looking forward we have great sales coming up. Our market was only really frozen for a very short time.”

The Rich Are Different…

This resurgence could be a reflection of a recovering economy, or merely evidence that at the top, things never really change.  While all groups lost income during the recession, middle- and lower-income Americans suffered far more than their richer counterparts, as job layoffs and foreclosures took their toll.

“The rich are still rich and are apparently eager to forget the art market's swoon,” the New York Observer’s Alexandra Peers observed during the lead up to this week’s sales. The buyers were there all along, says Jordan. “It was with the sellers where confidence was really lacking,” he says. “They were under-confident about us bringing in top dollar for their works.” Like in real estate, where many would-be sellers held onto their homes until after the worst had passed, owners of great works of art were holding onto their prized works until the market picked back up.

Now that the fear of a second Great Depression has ebbed and there is a sense that the slump has bottomed out, owners are no longer hoarding their goods. And collectors are eager to get back in the game.  “Before, very little was for sale either publicly or privately, which made what was coming up for sale even more desirable,” says Jordan. “And now what we’ve seen is sellers’ confidence grow and grow.”

That confidence may have overflowed this week as the May auctions -- an annual tradition and a barometer of how the other half is living—took a positive leap. In addition to the Picasso, other works in the Christie’s auction brought in another $229 million, putting the evening’s total at $335.5 million, a record for a single-owner sale in New York, according to Jordan.

But what made Picasso’s “Nude, Green Leaves and Bust” enter the record books was a perfect combination of elements. “You don’t see many like this available,” says Donald Marron, the financier, noted art collector, and former president of the Museum of Modern Art. “It’s strong, it’s big. It passes a lot of tests as a work of art,” Marron said.

“It’s a wonderful picture,” says Jordan. “It’s physically wonderful to look at, a rhapsody. But also, this great provenance; it’s been through only one owner since the artist. It was a bit of a rediscovery because it had only been known from black and white illustrations before. Three weeks ago was the first time it’s ever been published in color. And it’s also a very important picture. Of that 1932 series, it’s one of the greatest and most complex. And it was in great physical condition.”

“It was irresistible to collectors,” he added.

Irresistible, that is, if you’ve got $106.5 million to spare.