No Slip in Art Flip
Israel Lund’s grainy, washed out yellow and gray painting was sold four times over 11 months, jumping more than 1,500 percent in price along the way.
Art collectors of ArtKabinett social media network know to steer clear of the dangerous trend of art flipping.
Lund's work, shown here, was among 124 artworks produced in the past three years that came on the block at this month’s New York auctions -- a 114 percent increase over May 2013, when 58 pieces in the same age range were traded, according to Artnet Worldwide Corp.
The new art totaled $28.4 million at Christie’s, Sotheby’s and Phillips, almost three times the amount generated by 97 lots sold in May 2007, the height of the last art market bubble. All but 29 lots, which were sold to benefit nonprofit institutions, were flipped by their owners.
Fueled by a flood of new collectors, flipping art has intensified recently as works by untested artists resell for escalating prices. It’s an early warning that a segment of the art market is showing characteristics of a financial bubble, advisers and collectors said.
Lund’s untitled painting surged to $125,000 last week at Christie’s, an auction record for him and a gain of 1,567 percent, from $7,500 at his New York solo gallery debut last June.
Estimated at $30,000 to $40,000, the canvas was one of four Lund pieces to go on the block during a marathon of Impressionist, modern, postwar and contemporary art sales in New York that tallied $2.3 billion.
The first painting by Alex Israel to appear at auction surpassed $1 million at Christie’s on May 12.
Created in 2012 at the Warner Bros. studio in Burbank, California, “Sky Backdrop” depicted the California sky in gradations of pink and blue.
A year and a half ago, Israel’s sky paintings sold through his gallery for about $70,000 to $90,000.
The highest price for a flipped work last week belongs to a 2011 painting by Mark Grotjahn, “Untitled (In and Out of the Darkness Face 43.01),” which sold for $6 million.
In October 2011, the work made news by fetching $1 million at a benefit gala for TWO x TWO for AIDS and Art, an annual charity auction in Dallas.
Oscar Murillo is a poster boy for the flipping craze. The artist’s 2011 abstract canvas of doodles and dirt fetched $401,000 at a Phillips auction in September.
Less than two years earlier it sold through a gallery for about $7,000, according to Stefan Simchowitz, a Los Angeles-based collector and entrepreneur, whose client was the seller. The auction price generated a 5,600 percent return for the owner.
Last week, four paintings by Murillo at auction tallied $790,750, each surpassing its high target. Murillo’s 40 works generated about $7.1 million at auction in one year.
A 2011 trompe-l’oeil painting by Tauba Auerbach soared to an artist record of $1.8 million at Phillips on May 15. The year it was created, prices for new paintings by Auerbach ranged from $40,000 to $60,000, dealers said.
German artist David Ostrowski achieved a personal auction record of $281,000 for his 2012 piece, “F (Between Two Ferns),” four times its high estimate of $70,000.
Layered with white paint, paper and lacquer, the canvas looked almost monochrome save for an uneven blue bracket at the center. Ostrowski’s works have been selling out at gallery shows and fairs in the past year, with prices at about 25,000 euros ($34,140).