How are auctions important for the art market today Essay

How are auctions important for the art market today - Essay Example For example, in other industries like the real estate, once the construction of the house is complete, the builders and architects will mostly not have any meaningful relations with the particular building or house. However this is different in the art world since the artist will have a central correlation with the art they have created; in this context, the role the art market plays in the art world and the artist’s own career is somewhat intricate and can vary from one artist to another and from one region to another. It is with this in mind that I have split my essay into different categories. Firstly, I will discuss the art market as a whole before looking at the aspect of art valuation. The second area will be covering the determination of the price for a painting. Thereafter I will finish my essay with a conclusion on how all these aspects are important for the art market today as much as the contribution to how a painting or an art piece will be auctioned. Art Market Re cognition of art as a feasible and valuable alternative asset class has made a situation where the art market is increasingly being promoted purely as a means for monetary gains. New investments dealing in arts have been created in the last few years and this shows how the society has grown the confidence it has on the art market as a method of building wealth and as a way of diversifying the investment range. This art market is continuously growing even though it is a new and small market compared to other investment markets. According to Singer and Lynch (94), the art market is divided into four categories that are diverse. The fourth category is mostly for the illicit aspect of the art market. The first one is referred to as primary which deals with art that is in the open market for the first time; once the art has been sold it will be in the secondary possession thereafter if it is auctioned the tertiary stage will be under this category. This means that before an art is auctio ned it has to undergo probably the three faces (apart from the illicit market) and through the facets the value of the art piece might increase or decrease depending on the quality and the significance. Art valuation: Art valuation is the basis for dictating the significance of the art in question, whether the art is very good or very bad. This is an art-specific division of financial valuation. The process will involve giving an approximate value (valuation) or estimating the potential market value of works of art and thus this makes it more of a financial concern rather than an aesthetic concern (Fenner 28). The subjective views and opinions of the art also play a major role in the valuation process. The valuation itself will involve comparing the data and analyzing the trends of the art from various key players like collectors, auction houses, museums, curators and even art dealers among many other important art players. These key players will mostly arrive at a value that they w ill deem. The art market is dictated by the valuation which in turn determines whether an art is good or not. A good art will have a high market demand as many people will be after this piece of art and at the same time liquidity of the art means that the art is very easily sold without any impediments hence the art is deemed as a good art. Other factors that will make an art be good will include the valuation trend whereby if an art