Galleries remain upbeat despite dip in fine art prices

Buying art with an eye toward profit is a risky business.

Just ask Joyce Newman of Newman Appraisal Services in Reno, who likens collectables to stocks, bonds and gold. For serious collectors, art is just another part of their portfolio. However, she says, the recent age of exuberance fueled an art bubble akin to the housing bubble.

"On the whole, art values have dropped," she says. "Although the high end has held value better."

She points to the annual spring contemporary art sales staged by the internationally famed auction houses Sotheby's and Christie's.

"They set estimates lower because of a decline in the market. We saw some fairly dramatic declines. And contemporary art has taken a bigger hit than old masters."

Christel Citko, owner of Art Source in Reno, says it's important to distinguish between a collector and an investor. A collector buys with the hope that a piece will increase in value, while an investor has a plan, a program, a package.

"An investment is a purposefully monetary investment," says Citko. "That's so different than decorating your house with fine art. If you buy a good painting, a good painting gives you something back."

But some people want it all. "They wish both to enjoy what they're purchasing, but knowing it will hold its value. Those I lead into other things, like the masters," Citko says.

Despite dramatic drops on the national scene, area galleries are holding their own.

"In spite of the economy, I've upgraded," says Citko. "Everyone is really looking for value for their dollars."

And galleries that represent regional as well as world artists have largely dodged the decline.

At Stremmel Gallery, owner Peter Stremmel says, "We haven't repriced our inventory. Our sales are down marginally from last year. However, that was an exceptional year."

And a recent show of 41 pieces by area artist Phyllis Shafer sold out before the opening reception, he says.

"Selling art is a unique industry," says Stremmel. "It's very personal. We have established clientele and artists."

Not all local artists sell so well as Schaefer.

"In Reno there's a secondary market for some northern Nevada artists," says Newman. "But for up and coming artists, there is no secondary market."

Still, she adds, that's no reason not to buy. "You may want to buy it because you love it and because it's beautiful."

Jack Bacon & Co. represents Nevada artists, both current and vintage, at its Reno gallery.

"Prices are holding steady," says owner Jack Bacon. However, he adds, "We don't set out to sell investments."

The gallery takes resale pieces on consignment. "People are getting prices that match or exceed what they've paid," he says.

Still, he admits, "There has been a drop in business a 30 percent decline in picture framing and a 20 percent decline in art sales.

Yet while paintings are down, documents are up. Bacon also appraises and authenticates historical documents such as military commissions signed by Abraham Lincoln and astronaut books signed by Neil Armstrong. Recently he sold a movie contract signed by Greta Garbo.

"Such an item would usually bring $2,500," he says, "But it sold for $3,500 to a European collector."

Bacon's says he's seen a big increase in similar sales. "I suspect people view this sort of collectable as a haven, like gold."

In the upper reaches of the art world, it's a buyers market.

David Walker, president and executive director, Nevada Museum of Art says, "It's a great time to purchase art because the climate today makes a tremendous opportunity to purchase work that might not have been affordable two years ago.

"Many of our country's greatest art collectors faded from the market over the past 18 months because prices for contemporary works reached such exorbitant prices, they wondered if there was value there. After the market correction, works are more accurately priced today."

Entry-level art lovers in particular should take note, says Citko.

"It's a perfect time for young people to start a collection. They should be aware that the baby boomers are picking up the best pieces. The boomers are purchasing a lot of what's already become collector quality. So purchase etchings now, because less and less is becoming available to young collectors." But she cautions,

"Don't ever expect a glicee (machine produced print) to increase in value."

For sellers, it's a different story.

Perhaps needing money to cover bills, some well-heeled people from the Lake Tahoe area are coming in to Art Source, wanting to sell pieces.

"I try to discourage them from selling in this market," says Citko. "Art has been inflated for a long time. Today's prices are easily half.

If you do not need to sell your collection or sell your house at this time, don't."

While price declines were dramatic at the national auctions, says Stremmel, "We don't deal with a lot of secondary market business. People take resales to auction houses. Every asset class in this country has been affected by this downturn. In this market, it would not be a wise move to put items up for sale."

And Newman advises, "I think values will recover, but that will parallel the economy. People just love to have beautiful things."