The global economic downturn finally caught up with the art market in November during the Impressionist and modern evening sales in New York. As Christie’s and Sotheby’s registered a nasty rash of buy-ins, bottom fishers and born-again connoisseurs who had long been priced out of the market took advantage of the houses’ lowered expectations to buy many works for less than their estimates.

Although it wasn’t pretty, Sotheby’s pulled off the best evening sale of the week on November 3. Using the same strategy it had practiced during its contemporary-art sales in London, the house beat down consignors’ reserves on lots with bullish estimates that had been set weeks before the world financial meltdown. By increasing the chances that these works would sell, Sotheby’s saved its skin, ensuring a high overall take that covered its losses on guaranteed ones.

Even so, in this tough-love market, hammer prices for the house’s offerings were 20 percent or more below the low estimates. This trend was evident early on, as the London dealer Libby Howie nabbed Maurice de Vlaminck’s Fauve Le Remorqueur, 1906 (est. $4-6 million), for $3,666,500. "It’s a very good work by him," says Howie, "but I wasn’t going to go any higher."

The new price ceiling kept a tight lid on bidding, as bargain hunters shopped in an almost contest-free atmosphere. The New York gallerist Jack Tilton, for instance, faced little competition for Monet’s reflective landscape Printemps à Vétheuil, 1881 (est. $1.5-2 million), which he nabbed for $1,314,500. And London’s James Roundell got a deal when he scored Henry Moore’s bronze Working Model for Draped Reclining Figure, 1977-79 (est. $2-3 million), for $1,818,500. It was one of 16 lots guaranteed by Sotheby’s, which seemed steeled to letting the items under its control go for below their estimates rather than wind up with unwanted material.

Despite this flexibility, four guaranteed works failed to sell, including Henri Matisse’s striking portrait Titine Trovato en robe et chapeau, 1934 (est. $12-18 million). "Last chance," warned the auctioneer, Tobias Meyer, "unless somebody else bids in the room." The silence was deafening, and the picture crashed at $8.75 million. After the sale, Sotheby’s publicly stated that it had lost $10 million on guaranteed lots. After suffering a hit like that, the house is sure to abandon its high-risk habit of offering guarantees and retreat to its traditional role of agent, not principal.

A seismic shift was obvious in both mood and statistics. Of the 70 lots offered, 25 failed to sell, the highest buy-in rate for a Sotheby’s Impressionist and modern evening sale since 2005. And although the whopping buyer’s premium partially disguised the lackluster tallies, the house’s total take of $196.9 million, excluding the sale charge, was a mere 46 percent of its $347.8 million low estimate.

Notwithstanding the dismal atmosphere, the auction managed to produce records, including one for the costliest picture of the season, Kasimir Malevich’s 1916 abstract masterpiece Suprematist Composition (unpublished estimate in the region of $60 million), which sold on a telephone bid taken by Roberta Louckx for $60,002,500. There did not appear to be a contingent of Russian buyers — whose activity at auction has receded since the collapse of their stock market — vying for the piece. The picture was consigned by the artist’s heirs, to whom it was awarded after years of legal jousting with the city of Amsterdam and the Stedelijk Museum, where it had hung since 1958. Sotheby’s guaranteed the work for an undisclosed but no doubt princely sum. The house backed this up with an "irrevocable bid," an arrangement in which an outside person agrees to pay an undisclosed sum, plus the buyer’s premium, for the piece if no higher bids are received. To indicate the existence of this unusual arrangement in the item’s catalogue entry, Sotheby’s printed a sideways horseshoe next to its guarantee mark.

The catalogue entry accompanying another record-breaking lot, Edvard Munch’s sensationally seductive Vampire, 1894 (unpublished estimate in excess of $30 million), included the same horseshoe symbol, which in this case the house insisted was a typo. The preview audience was abuzz with speculation that the misprint defense was covering up the defection of a third party who got cold feet. But it proved to be much ado about nothing: There was fierce competition — driven by, among others, the Russian-speaking Gagosian director Victoria Gelfand, who sat next to her boss in the salesroom — for Munch’s eerily romantic depiction of a red-tressed woman biting the neck of a subservient male victim. It ultimately went to the phone for $38,162,500.

Sotheby’s had a tougher time dispatching another guaranteed item, Edgar Degas’s emblematic Danseuse au repos, a pastel and gouache on joined panel done around 1879 (unpublished estimate in excess of $40 million). The consignor — reportedly the takeover magnate Henry Kravis — had acquired the work at Sotheby’s London in 1999 for a then-record price of £17,601,500 ($28 million) against an estimate of £5 million to £7 million ($8-11 million). As activity palled in the subdued salesroom, Meyer made the disarming announcement that he would sell the Degas at $30 million. His words prompted another round of bids, and it sold to the phone for $37,042,500, a record for a Degas.

The market for masterpieces is alive and well, affirms the Sotheby’s vice chairman of Impressionist and modern art worldwide Emmanuel Di-Donna, but when it comes to more ordinary works, "there needs to be a readjustment of prices. It’s just a question of finding this new level."

Two nights later, Christie’s suffered a bust with its unluckily timed and ill-conceived Modern Age auction, a stand-alone sale of two separate American single-owner collections, from the Hillman family and Alice Lawrence. The pretentiousness of the session — whose matching hardcover catalogues weighed like cement boots on a drowning market — might have worked in a frothier current, but with the Dow dropping like a stone after the U.S. presidential election, the bizarrely organized sale also sank fast.

Luckily, at least for the Christie’s bottom line, none of the Hillman works carried guarantees. The conservative group got off to a decent start, as Georges Seurat’s Maison carrée, 1882-84 (est. $800,000-1.2 million), fetched $1,082,500 from a telephone bidder. The New York gallerist Helly Nahmad was the underbidder on two pieces that performed respectably: Jean Dubuffet’s evocative Vue de Paris, quartiers résidentiels, 1944 (est. $3-4 million), which brought $3,666,500, and Giorgio de Chirico’s shadowed Composition métaphysique, 1914 (est. $6-8 million), which brought $6,130,500. Buyers’ energy evaporated halfway through the collection, however, with its star work, Édouard Manet’s Fillette sur un banc, 1880 (est. $12-18 million), flopping under a chandelier bid of $10.5 million.

The postwar works and Art Deco objets from the chock-a-block Alice Lawrence collection — which Christie’s guaranteed across the board — did not revive enthusiasm. There were several bright spots, including the small but glowing René Magritte gouache L’Empire des lumières, 1947 (est. $2-3 million), which sold to the Long Island dealer David Benrimon for $3,544,500, and Alice Neel’s brilliant oil portrait Robert Smithson, 1962 (est. $300-400,000), which shot to a record $698,500. But the most expensive offering, Mark Rothko’s dark and stormy No. 43 (Mauve), 1960 (est. $20-30 million), capsized at an imaginary bid of $16 million.

The climate improved at the various-owners sale the house held the next night. Although the overstuffed, 82-lot session ended up with the most unsold works of any evening auction since November 2000, all the guaranteed pieces found new homes. The cover lot, Wassily Kandinsky’s color-charged Expressionist oil and gouache Studie zu Improvisation 3, 1909 (est. $15-20 million), brought $16,882,500 from a telephone bidder. And a new record was established for Juan Gris, whose Cubist masterpiece from 1915, Livre, pipe et verres (est. $12.5-18.5 million), was grabbed by the New York dealer Franck Giraud for $20,802,500. "I was surprised there was competition," says Giraud, explaining that he acquired the painting for an American collector who had long coveted it. "It just shows the market is intelligent and there’s a lot of competition on the rare things."

Relative to the economy’s dramatic downturn, the performances of the trio of evening sales was far from a rout. "There’s still a little bit of life left in the market," says the Christie’s CEO Edward Dolman, "and I think that’s what people should be concentrating on."
"New York: Impressionist and Modern Art" originally appeared in the January 2009 issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's January 2009 Table of Contents.