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The market for 20th Century design expanded rapidly over the last half decade with both classic designers and emerging talents receiving ever-growing positive market attention. As the market has grown and discovered extraordinary examples of design in furniture and decorative objects, the number of collectors expanded but not at the same rate as the turnover of lots. This has left the 20th Century Design market with an imbalance between the number of lots offered and the level of interest from buyers.

June's sales of 20th Century Design objects in New York demonstrated this. There were 648 lots offered at all three auction houses combined. An additional 349 lots had been sold at Wright in May. This was clearly a number greater than what the market could absorb. And though the individual sales ranged from 148 lots at Sotheby's to 555 lots at Wright, each house had similar sell-through rates, from 57% to 64%.

Christie's also held a sale of decorative bronze and ivory figures that netted $2,135,750 from 14 lots but these Art Deco items are not comparable to the objects sold at the other three auctions and so have not been included in the combined numbers.

In the 20th Century Design sales, buyers were searching for unique lots, especially items that were new to the market either because they had been held in one family for generations or because they represented an emerging talent whose work had been thinly traded. When collectors found these rare works of high quality, they bid with enthusiasm, proving that real support remains in the market.

Significant Sales

"Our department strategy was to keep this sale as edited as possible," said Jodi Pollack, Vice President and Senior Specialist of Sotheby's 20th Century Design Department. "That's been the pattern over the last two seasons: our clients respond to more edited sales of fresh, exciting and rare examples."

The top lot of the week is a prime example. The Tiffany "Apple Blossom" table lamp had been owned by one family since the 1950s who thought they had one of the firm's iconic "Wisteria" lamps. But upon inspection, Sotheby's determined that the lamp was something that had never come to auction before. That fact alone brought many Tiffany fans into the auction house. "All the top Tiffany collectors came out to look at this lamp," Pollack said. "We were hearing from collectors we'd never worked with before."

Selling for $932,500, nearly the triple the high estimate for the lot, the lamp proved the thesis that 20th Century design is experiencing the same "flight to quality" seen in other major collecting categories. Half of the top ten lots in the sale were Tiffany lamps where a deep, seasoned and educated group of collectors hold sway.

Among the remaining lots were a rare stylized sculpture of a locomotive by the Martel brothers and a George Nakashima "Conoid" table that sold well above the high estimates with strong bidding. Nakashima, now one of the blue chip names in this field, offers a good example of the dynamic at work as collectors adjust to a market of super fluidity. "As expected, great Nakashima pieces performed strongly," Pollack said. "But for the first time, we're also starting to see more marginal examples of Nakashima pass at auction. People are getting a bit more discerning. They are willing to compete aggressively for something truly exceptional they don't think they'll have another opportunity to acquire."

An Isamu Noguchi table offers another facet. Noguchi's market is connected to the Contemporary art market because of the sculptor's range of work. As prices rise for Noguchi's sculpture, they seem to be having an effect on the value of his design work. The prismatic table in Sotheby's sale is the mate to one that was auctioned at Wright in 2006 for $132,000. This one sold for $290,500, a rapid appreciation in just two years or a good example of the broader international marketing reach of a large auction house. Sotheby's would be happy with either explanation for the price rise.

The final demonstration of the market power of rare work comes in the form of three lots by Wendell Castle that all appear on the list of items that exceeded their estimates by the greatest margin. In this case, the Castle pieces all came from the original family who had commissioned them. Thus they were both unique and part of the growing interest in design work from the 1960s and 1970s. As collectors migrate from the classic names of the 1950s, the appearance of Wendell Castle works that had never seen the market was sure to entice bidders. "Anytime we can present iconic studio pieces consigned by the original commissioning family," Pollack stated, "there is surely going to be great market demand."

Significant Bidders

The best way to illustrate the fact that the 20th Century Design collectors are consolidating their holdings is to look at the number of bidders in recent sales.

In the Fall of 2007, Sotheby's held two sales: one of 20th Century Design in November and another of Post-War Design in December. The goal was to accommodate the flood of collectors and objects on the market. Because there were two sales, the number of bidders may be exaggerated as there are surely collectors who bid in both sales.

Nonetheless, June's sale saw fewer than half the bidders at Sotheby's than were present last Fall. In a direct comparison to June 2007, the number of bidders dropped by 40%.

The number of bidders steadily rose in that period reflecting the growing interest in design as an auction category until this last sale when there was a substantial drop.

Market Trends

A market consolidation is a natural part of the cycle of interest and growth. At Sotheby's, the process of reducing the number of lots on offer has already begun. The number of lots purchased reflects this conservative approach. But, at the same time, the average lot value in Sotheby's design sales rose dramatically in the June sale capping a longer-term trend to higher value lots.

With fewer lots sold, the average lot value was much higher. So Sotheby's has been able to locate better examples of 20th Century Design work that can command higher prices even in the new market environment.

Again, this pattern is hardly confined to the 20th Century Design category. Throughout the art market, there is a continuing focus on quality with price action following that quality.

Perhaps more interesting to note is the way that estimates at Sotheby's have kept pace with the market. Total sale value in the 20th Century Design field came back to levels close to the Spring of 2006. In accelerating markets, prices will exceed estimates as collectors set new valuation levels.

In the Fall of 2006 and Spring of 2007, Sotheby's sale totals rose sharply for the 20th Century Design field. Those totals represented more than 135% of the Median Estimate for all lots for both sales. In other words, the sale total was greater than the value represented by the mid-point between the overall low and overall high estimate.

In the Fall of 2007, estimates caught up with the new market conditions. The sale total continued to rise—indeed, by a substantial margin—but the estimates were higher. This Spring one would expect to see estimates overshoot sales as consignors, expecting high prices established in the more aggressive phase of the market cycle, hold out for top dollar.