Picasso Painting Sets Auction Record

By
Real Estate Agent with Red Lady Realty

I found the news this morning that a Picasso set an auction record last night a very interesting fact in this economy. With the unending doom and gloom surrounding not only the US economy, but the world's economy, the news that an intense bidding war propelled a 5 x 4 foot painting to sell for over $106 million is quite a statement about where we really are economically.

The US economy is showing other signs of renewed spirit. The economic statistics have been showing signs of improvement. Consumer spending has been rising. Job numbers are starting to improve, and I am hearing that real estate in urban areas is picking up quite nicely.

For those of us who deal in real estate in resort communities, i.e. second home markets, these signs are encouraging, but we have yet to see the actual numbers picking up. I liken this to the tail of the dog. The dog is showing improved health, but he doesn't start wagging his tail until he is all better. Our market is the tail of the dog. When people are under financial duress, they do all they can to protect their primary residences. The second home market, unfortunately, won't show signs of improvement until after the primary home market improves. We are seeing that now, so hopefully an uptick in our market isn't too far behind.

Back to the painting. The commission for Christie's on the sale of this painting was 12%, or approximately $11.4 million. Not even considering the outright sales price of the singular work of art, let us examine only the commission on this sale. $11.4 million in Crested Butte real estate can buy you a $4,750,000 spectacular house on 35 acres close to town. It is over 9000 square feet, has high end finishes and spectacular views overlooking Long Lake. $5.9 million can buy you a ski-in ski-out house that has the finest details in finishes on 1.5 acres, and its own indoor pool and putting green. Or, you could buy both houses and still have $750,000 left for furnishing them, including the artwork.

(Diane Aronovic is a former Managing Director at Bank of America Securities, and a real estate agent at Red Lady Realty in Crested Butte, CO)

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Rainer
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David Obbee
Obbee.com - Agoura Hills, CA

Diane: Interesting post- I had similar thoughts when I heard about the sale on the tv news.  With all of the problems in the world, it amazes me anyone would pay over $1 million for some canvas on the wall (no disrespect to Picasso!).  Thanks for sharing!

May 05, 2010 11:00 AM #1
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Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495

Probably just a wise investor buying in a down market...

May 05, 2010 11:01 AM #2
Rainmaker
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Palm Properties l La Jolla Real Estate
La Jolla, CA

Amazing price for the Picasso!  Evidently there are people with discretionary funds out there!

May 05, 2010 11:01 AM #3
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Randy Benefield
Benefield Realty, DRE 01442405 - Petaluma, CA

This just proves that there is real money out there somewhere. Most do not have that kind of money. It is ironic that someone would spend that much on a painting when there are many in the world that are suffering. But if this is a sign of a changing market for the good, I hope the renewed confidence in the market is pushing to a better economy.

May 05, 2010 11:04 AM #4
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Ted Tyndall
Davidson Realty Inc. - Saint Augustine, FL
FL Homes for Sale-Palencia, World Golf Village,Nocatee,St. Augustine

Diane, I guess the price is relative to your net worth.

May 05, 2010 11:04 AM #5
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Diane Aronovic

Real Estate is an investment,choose a professional
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