PICTURE perfect
Well-chosen art can enhance the value of your home
The relationship between high art and noteworthy buildings is as old as civilization itself: think of the celebrated sculptures that once adorned the exterior of the Parthenon in Athens, or Michelangelo’s magnificent ceiling frescoes for the Sistine Chapel in Rome. And when it comes to residential properties, nothing enhances an extraordinary home like a carefully crafted art collection. Virtually every cover story in Architectural Digest illustrates this point: important paintings hanging on the walls of a Park Avenue apartment or a French Riviera mansion signify beauty, taste, and style, elevating the perceived value of a home.
Art’s power to enhance an extraordinary residence has been proven again and again over decades of high-profile sales, in which Sotheby’s International Realty offered the homes of collectors whose art was also brought to auction through Sotheby’s. A few cases in point: in 2013, the Modern art collection of Alex and Elisabeth Lewyt, headlined by a rare Paul Cézanne still-life, sold for a total of US$99 million across 23 auctions in New York and Paris, far above the presale estimate. Likewise, their New York townhouse, sold by Meredyth Hull Smith, senior global real estate advisor and associate broker, Sotheby’s International Realty - East Side Manhattan Brokerage, achieved US$8 million, while their Sands Point Long Island estate, represented by Daniel Gale Sotheby’s International Realty went for US$17 million.
That same year, Jack Cotton Jr., real estate advisor, Sotheby’s International Realty - Osterville Brokerage, sold Rachel Lambert “Bunny” Mellon’s Cape Cod estate for a record US$19.5 million. Mellon was one of the greatest art collectors and philanthropists in the U.S., and a sale of “masterworks” from her collection at Sotheby’s created a sensation in November 2014, when the single-owner auction flew past its estimate to bring in a total of US$159 million, while her jewelry achieved US$45 million, more than doubling expectations.
We continue to see the marriage of art and real estate in today’s homes. Michael Carucci, executive vice president, Gibson Sotheby’s International Realty in Boston, Massachusetts, credits “the fusion of fine art and luxury real estate” as central to his success in selling some of the most valuable properties in New England. “It is very typical for owners of homes worth US$10 million and higher to be collectors,” Carucci says.
He often invites artists to show their work in properties he is representing, transforming residences into galleries. In 2020, he commissioned celebrated Boston artist Giovanni Decunto to create a suite of paintings for One Dalton Four Seasons Private Residences; the eventual purchaser of the US$7.2 million apartment fell in love with the paintings and bought them as well. Carucci is currently offering a US$10.9 million Boston penthouse at 1 Franklin Street; its owner is a well-known mega-collector, which has already sparked high buyer interest.
Like Carucci, Tania Toubba, real estate advisor, Sotheby’s International Realty - San Francisco Brokerage, recognizes the uncanny power of art to sell a home. “There is no better way to create environments that resonate with discerning buyers than to showcase a carefully curated art collection,” says Toubba. She is currently offering a sensational 8,000 square foot oceanfront residence in the Sea Cliff neighborhood of San Francisco, California, priced at US$26 million.
To show the house to its best advantage, she brought in artist Paul Rusconi to curate a collection of paintings, sculptures, and works on paper by blue chip masters including Robert Rauschenberg, Elaine de Kooning, John Chamberlain, and Damien Hirst. The launch event was treated like a gallery opening, attracting top-tier brokers, architects, designers, and builders. “It was a bold move that paid off,” says Toubba. “Our guests were blown away. The profound reaction to the installation affirmed that individuals develop a deeper emotional connection to a property when showcased with art.”
While finding the perfect luxury home can be time-consuming, buyers have a plethora of publicly available sales data to help them assess the particular market they are interested in. When it comes to high-end art, however, the market is famously one that is closely guarded, with fewer data sets available to the public, which has given rise to an industry of advisers, dealers, and other experts. For the uninitiated, entry into this world can feel daunting. Fortunately, a handful of publicly available art market reports provide hard data and important context that can be helpful for anyone contemplating the purchase of investment-grade art.
Foremost is the annual Art Basel and UBS Global Art Market Report. The latest edition, released in March 2024, provides the broadest assessment of the current global art market and is considered the most reliable. According to the report, the global art market totaled US$65 billion in 2023. This figure, which includes sales at auction and through galleries, is slightly below 2022, but still above pre-pandemic levels. The U.S. remains the largest market for art in the world, accounting for 42% of all sales (US$27.2 billion). For the first time, China surpassed the U.K., becoming the second biggest national market; a 9% year-on-year increase brought that country’s total sales to US$12.2 billion. The report credits post-Covid demand and the return of art fairs to Hong Kong as fueling that dramatic growth.
Sotheby’s auction house has seen participation in auctions grow substantially since the start of the pandemic, largely due to the rise of online auctions and an increased focus on digital marketing. Year-end statistics show that the number of bidders increased 28% from pre-pandemic levels, in 2019. Last year saw an astonishing 11% growth in bidders from 2022, of which 44% were new customers. To meet increased demand, Sotheby’s now mounts 25% more auctions than in 2019, and offers many more items estimated at less than US$10,000. Interestingly, the luxury categories—watches, jewelry, and wine—fueled much of this growth and are now the biggest entry point for people interested in trying out the auction experience.
When buying real estate, the old maxim is that location is everything. For art, it is artists who power the market, and the most recent Sotheby’s Insight Report, published by the auction house in March and December 2023, identifies the 50 most bankable. While it is impossible to predict the future of the market with certainty, works by these artists have proven to be the most coveted over the past five years, and thus the most likely to maintain or increase in demand. All artists included in the top 50 today were born in the 19th and 20th centuries. Here are a few key takeaways for those considering investing in the high end of the art market.
Poised on the edge of the Pacific Ocean, this extraordinary residence stands as a rare oceanfront gem in the prestigious San Francisco, California, neighborhood of Sea Cliff.
Sotheby’s International Realty - San Francisco Brokerage
“ IT IS VERY TYPICAL FOR OWNERS OF HOMES WORTH US$10 MILLION AND HIGHER TO BE COLLECTORS
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Michael Carucci, executive vice president, Gibson Sotheby’s International Realty in Boston, Massachusetts
The Five: Picasso, Monet, Warhol, Basquiat, and Richter
The art market is a pyramid, with tens of thousands of artists at the base whose prices are extremely affordable but aren’t likely to increase in value. The top end is much more selective: fewer than 900 artists have sold works at auction for more than US$1 million over the past five years, and just five account for a third of the total market during this period. Pablo Picasso, Claude Monet, Andy Warhol, Jean-Michel Basquiat, and Gerhard Richter never go out of style. The first four are among the few whose individual works have surpassed US$100 million at auction.
Women ascendant
For most of recorded history, women were prohibited from becoming artists, and the few who overcame these restrictions were either ignored or relegated to second-class status, with little institutional support. As a result, they are underrepresented in museum collections, and were rarely the subject of career-making exhibitions. That is starting to change, as major museums focus more curatorial attention on female artists from all periods and the auction market realizes their potential. Leading the pack is the Abstract Expressionist Joan Mitchell, the first woman to break the US$10 million barrier at auction. She ranks at 17 in the top 50 by total sales, followed by Yayoi Kusama at 19, British painter Cecily Brown at 39, and Helen Frankenthaler at 47. Women have made tremendous gains in the market, but with just five represented in the top 50, there is still a long way to go.
Michael Carucci commissioned Boston artist Giovanni Decunto to create paintings for this One Dalton Four Seasons Private Residences apartment.
Gibson Sotheby’s International Realty
Top 5 US$1 million+ artists by value 2018-2023 (H1).
Source: Sotheby’s Insight Report: The Artists Who Power The $1 Million+ Market.
A new generation
The fastest-growing segment at the upper end of the fine-art market is dominated by young artists, which the report defines as those born in 1977 or later. Romanian artist Adrian Ghenie and Canadian Matthew Wong, who died at age 35 in 2019, both made it into the top 50, but several up-and-coming artists, notably 34-year-old British Flora Yukhnovich and 41-year-old Nigerian Njideka Akunyili Crosby, have injected excitement into the market, with rising prices resulting from the surge in demand.
Asian opportunities
Works by several Chinese painters, including Zao Wou-Ki, Zhang Daqian (a protean figure who is often compared to Picasso), Sanyu, and Liu Ye, are among the most valuable in the world, but these artists are little known outside of their home country and their markets have generally been limited to buyers within China. Given the depth and quality of their work, it seems only a matter of time before the rest of the collecting world catches up. By contrast, Japanese artists Yayoi Kusama and Yoshitomo Nara have international followings: in fact, Kusama’s star keeps rising, perhaps because her recognizable art has become central to Louis Vuitton’s international advertising campaigns.
As with real estate, the fine art market experiences ups and downs. Education is key to understanding the market, and there are now more resources than ever before to judge its value. But regardless of its investment potential, great art has an uncanny ability to elevate a home—and add immeasurable pleasure to the lives of its occupants.
More from the report
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