Sunday, June 03, 2007

Mortgaging Fine Art

There was an interesting story on Marketwatch last week about financing of art purchases. Notably, Sotheby's and Citigroup offer art loans. That Sotheby's should do so is interesting, seems there's more money to be made on the loans than in selling the art (well, duh, just do the mortgage calculation one day crionna...ed.).

One thing not really mentioned in the article is how this could have an affect on the "value" of the art. If you're a good customer of Sotheby's or Citigroup (and what hedge fund manager wouldn't be?) and are guaranteed to get the piece you're bidding on regardless of price, is it really worth the price? Or, like homes, is there a bubble out there?

I'd guess that fine art, the kind that boasts are made of for owning is a lot like real estate in SF, or NYC; they're not making any more of it and it won't really be affected by any downturn that hits the burbs in the same way that a downturn might hit the sales of say, Thomas Kinkade...

PS. Here's an interesting site that talks about art as an investment vehicle.


Blogger Sunil said...

Thanks for posting that link to MarketWatch - very interesting angle there...

9:56 AM, June 26, 2007  
Blogger Camplin said...

I thought the art market was a little bubblely, but loans for buying art. That is out of control. Next you will see art galleries extending credit. Then we will see a crash that will make the 80's crash look like a picnic.

1:50 PM, July 11, 2007  
Blogger crionna said...

You're welcome. In fact, galleries already extend credit. Most collectors can walk into a gallery and buy a piece over time if they've made a good impression/relationship with the gallerist (and the piece isn't in too high a demand, of course). It's a great way for a gallery to cultivate a clientele IMHO.

4:55 PM, July 13, 2007  
Anonymous tmnk said...

As I painted, canvas taped to the doorway of this magnificent building in Soho, I remarked (quite confidently), "One day this painting will be auctioned at Sotheby's for more than this building it is currently taped to is worth." The friend laughed. I was quite serious.

5150: Some waste their time considering critics and the like. My rebelious brush needs no permission nor recognition. And with each defiant stroke, I create history - TMNK

1:50 PM, September 24, 2007  

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