Art market update: A turn toward untapped markets

Fall 2025

The art market continues to stand on shifting ground. Fine art auction sales contracted 10% year-over-year in H1 2025, marking a third consecutive first-half decline. This slowdown has raised questions about the industry’s long-term direction, especially as the U.S. economy shows signs of strength. Financial markets have rebounded since April’s tariff announcements, recovering all they had lost by mid-May. Inflation has stayed in check, and first-quarter consumer spending was positive, accompanied by a jump in capital expenditures for businesses. This momentum has transferred to the ultra-high-net-worth (UHNW) segment — total wealth in the U.S. is rising, and spending is up across a multitude of discretionary categories, including private jets, luxury real-estate, high-end cars, and more.

Why haven’t these catalysts prompted more fine art spending? While it’s true that the art market tends to lag broader economic indicators, a more nuanced shift is likely underway. Collectors are paying increased attention to under appreciated artists and collecting categories, driving up prices at the low end of the market. Meanwhile, sales of eight-figure masterpieces have slowed, suggesting that collectors have set their sights beyond the small handful of names that have historically defined the art market. What’s behind these changing tastes? Are they permanent? How are top collectors responding, especially those who hold high-value “trophy lots”? In this Art Market Update, we try to make sense of this current period of transition. 

This season’s art market trends

Masterpiece sales slow, sub-$10MM market gains momentum. A slowdown in eight-figure lots has pervaded art market headlines and skewed down-sale totals this year, while a quiet uptick in activity has taken hold across entry-level price points.

In H1 2025, the number of public transactions above $10 million fell a staggering 44% from H1 2024, and 72% from the previous post-pandemic peak in H1 2022.¹ That figure becomes more pronounced when moving up the price ladder. Thirteen lots sold for more than $50 million in H1 2022, compared to zero in H1 2025.¹ While this contraction is at least partially driven by persistent supply constraints and a pivot to private sales, demand may be softening, too. The most expensive lots that did hit the market this past May largely scraped by to meet their low estimates. And two of the six lots with estimates above $30 million didn’t find buyers at all: Alberto Giacometti’s 1955 Grande tête mince (estimated at $70 million, failed to sell) and Andy Warhol’s 1967–68 Big Electric Chair (estimated at $30 million, withdrawn pre-sale). These results prompted Artnet’s News Editor Margaret Carrigan to ask, “Are trophy lots losing their winning allure?”²

Regardless of whether the high-end downturn is driven by supply or demand (or both), the rest of the art market is moving in a more positive direction. Whereas sales of $10 million+ artworks declined 39% year-over-year in the May 2025 evening sales, sales in the sub-$10 million segment rose 17%.³ For day sales and middle-market incubator sales, H1 2025 marked a three-year high in sell-through rate and price-to-estimate ratio.⁴ The total number of transactions tells a similar story — 2025 saw the second-highest number of H1 lots sold since 2016, surpassed only by 2023, another down year in the $10 million+ market.⁵ This shift is shaping the private market, too. In 2024, dealers with turnover of less than $250,000 reported the largest increase in sales (17%), while the $10 million+ segment contracted 9%.⁶

Overall transactions tick up

2025 saw the second-highest number of H1 lots sold since 2016, driven by momentum at the lower end of the market. (Data from Christie’s, Sotheby’s and Phillips.)

H1 lots sold 

(2015 - 2025)

Source: ArtTactic, as of July 2025

What’s behind this trend? The number of buyers and sellers of eight-figure “trophy lots” is always limited, making this area of the market susceptible to big swings, both up and down. Meanwhile, a broader group of collectors is showing interest in new and undervalued artists, driven by changing tastes, a more globalized and digitally connected art world (exposing collectors to smaller galleries and lesser-known artists), and a push by major museums to spotlight historically overlooked artists in their headline shows. In addition, millennials and Generation Z — who now account for up to one-third of total bidders at Christie’s and Sotheby’s⁷ — have entered the art market with smaller budgets but a strong drive to collect, cementing competition at lower price points.

As we head into the November marquee season, it’s become apparent that even when the biggest lots cool off, the art market can still show signs of strength — it just depends on where you look. We expect continued competition at day sales, a growing number of transactions at approachable prices, and fierce bidding wars for breakout artists.

Sellers hedge risk. Collectors have grown increasingly risk-averse when selling art, prioritizing safety over upside. Auction guarantees, a strategy long employed by cautious sellers, have risen to new highs this year. Think of a guarantee as insurance; a counterparty, the “guarantor,” commits a minimum bid to a seller. In exchange, the guarantor keeps a percentage of any amount above that minimum. Looking at the three major auction houses, nearly half (45.5%) of all post-war and contemporary evening sale lots were guaranteed in H1 2025, a 13% increase year-over-year.⁸ That share jumps to 73% when weighing guarantees by value instead of volume, the largest figure recorded to date and a 13% bump from 2024.⁸ While auction houses historically reserved these deals to win the highest-value consignments, middle market guarantees are now seeing an uptick as well. This past May, 20% of the total day sale value at Christie’s, Sotheby’s, and Phillips was guaranteed, over double its share in 2024.⁹

Guarantee activity surges

73% of post-war and contemporary evening sale value was guaranteed in H1, the largest figure recorded to date and a 13% bump from 2024. (Data from Christie’s, Sotheby’s and Phillips.)

Post-War & contemporary evening sales

 by guaranteed value (in USD millions), 2016 – 2025

Source: ArtTactic, as of July 2025.

Guarantees aren’t the only shift we’re seeing toward a more risk-off environment. Despite the recent downturn in auction volume, private sales at auction houses increased 14% in 2024, demonstrating consignors’ preference for price control and discretion.¹⁰ Proprietary Bank of America data suggests major private transactions ($30 million and up) have continued this year, both at auction houses and at galleries. In addition, Phillips announced a new fee structure in July that incentivizes early bidding, acknowledging sellers’ need for greater certainty. This November, “priority” bidders who bid at least 48 hours before a live sale will be rewarded with a lower buyer’s premium, while last-minute bidders will face higher fees than in past sales.¹² Like a guarantee, this new fee structure stands to give consignors and auction houses greater visibility before the sale, allowing lead time to pivot to an alternative strategy if interest looks thin leading up to an auction. Of course, it also provides an inducement for price-sensitive bidders looking for a discount to recently raised buyer’s premiums.

These new strategies have one point in common — they add safeguards to the traditional auction model. When the art market is thriving, auctions maximize value by exposing a work to more buyers, stimulating competitive bidding, and driving prices up without a ceiling. But in periods of greater uncertainty, they leave sellers more exposed to the risk of passed lots or public withdrawals, potentially harming the reputation of a work. As a result, more deals are currently taking place in advance of the sale date or behind closed doors entirely. This November, we anticipate more measured bidding and higher sell-through rates, a sign of guarantees and pre-orchestrated deals. As collectors’ risk tolerance decreases, more sales will be sealed before the auctioneer steps up to the rostrum.

Art lending defies the downturn. While some collectors are selling with greater caution in today’s art market, others are accessing liquidity without selling at all. Instead, they’re unlocking the value of their collections through art lending. Bank of America’s total art loan commitments grew 14% year-over-year in H1 2025,¹² despite stubborn interest rates and slower global art sales. While these diverging trends may seem contradictory, leveraging a collection as collateral offers a compelling alternative to selling. Rather than consign into uncertain markets and trigger a capital gains event, some collectors are choosing to wait for more robust market conditions while keeping treasured artworks on their walls, simply having them appraised once a year to serve as loan collateral. In the meantime, the liquidity from the loan allows collectors to take advantage of better-performing investments, such as private equity and real estate, and continue to spot attractive art acquisition opportunities. As the art market slowly recovers, we expect sophisticated collectors to continue borrowing for targeted financial opportunities and personal projects.

Alternate collecting categories outperform. Strong sales of jewelry, design, and novel collectibles have stood out against a more tempered art market. Most notably, design and furniture sales saw a 20% year-over-year increase in H1,¹³ signaling that collectors are placing increasing value on a category once overlooked as “decorative” rather than artistic and conceptual. While key artists driving this market — such as Les Lalanne and Alberto and Diego Giacometti — are historical, the growing popularity of contemporary design fairs has created tailwinds for the market. Notably, Design Miami, which will be celebrating its 20^th anniversary in December, continues to expand; it launched its Paris fair in 2023 alongside Art Basel Paris and opened its inaugural Seoul event in September.

Luxury categories have also seen an uptick in sales this year. Christie’s, the only major auction house to publish H1 2025 results, reported a nearly 30% year-on-year increase in handbags, watches, cars, and jewelry, with these categories now accounting for nearly one-quarter (22%) of total sales.¹⁴ Wine sales also saw remarkable growth in the first half of the year, up 63% year-over-year at the three major auction houses.¹⁵ And not least, a wave of unique collectibles with rich histories — including the original Hermès Birkin bag ($10.1 million), a Marie Antoinette-owned pink diamond ($14 million), a juvenile Ceratosaurus skeleton ($30.5 million), and an original Rosebud sled from Citizen Kane ($14.8 million) — captured collectors’ attention this past summer.¹⁶ Note that all of these auction lots sold above the $10 million mark, the very segment of the traditional fine art market that has yet to regain momentum. 

Alternate collecting categories gain market share

Non-art categories accounted for 28% of overall auction sales in H1 2025, providing a bright spot amid a slower fine art sales. Notably, sales for design, decorative art and furniture increased 20% year-over-year. (Data from Christie’s, Sotheby’s and Phillips.)

H1 auction sales 

by collecting category (in USD millions), 2015 – 2025

Source: ArtTactic, as of July 2025.

A key driver behind this more diversified collecting landscape is a surge of new bidders. Handbags, watches, and jewelry accounted for 41% of Christie’s new buyers,¹⁷ while over 20% of buyers at Sotheby’s and Phillips’ June 2025 design sales were first-time clients. For Phillips in particular, 20% of these bidders were millennials or Gen Z.¹⁸ Historically, auction houses have hoped these other categories will stimulate “cross-selling” between departments, bridging these new buyers to more expensive fine art purchases over time and increasing wallet share. However, this recent flurry of activity creates another equally plausible scenario — that new buyers view luxury, design, and collectibles as an undervalued substitute to fine art, leading to long-term growth in these categories. After all, these objects share many fundamental principles with fine art — craftsmanship, scarcity, provenance, and personal expression — without the huge price tag, educational barriers to entry, and legal risk (restitution or cultural property claims, for example).

A new ethos for contemporary collecting. Contemporary collectors are reevaluating their priorities, favoring engagement with working artists over secondary market transactions. As we discussed in our last Art Market Update, auction sales for young contemporary artists have seen a steep drop in recent years, contracting 71% at the three major auction houses from 2022 to 2024.¹⁹ While partly a natural correction following the speculative boom of 2020 – 2022, this decline reflects a broader idea: Fast-tracking early career artists into the secondary market can create unrealistic expectations, ultimately damaging those artists’ careers and market longevity. Thus, more collectors have embraced what some view as a more “responsible” approach to collecting contemporary art — one that puts artists at the center of the dialogue. Anecdotally, our collector clients have been increasingly interested in how they can interact with and support artists directly, whether through artist grantmaking organizations and residencies, studio visits, or artist-led panel discussions. These personal interactions lead to more direct acquisitions from the artist or gallery rather than from the more transactional, detached setting of an auction.

Such a shift is not without precedent. In the 1970s — another period where traditional markets softened — artists and patrons created networks beyond the mainstream market to embrace community organization and experimentation. Today, we’re seeing similar dynamics emerge, albeit accelerated by technologies such as social media and artificial intelligence. There’s renewed interest in artist-run spaces like Pioneer Works and Silver Art, independent art fairs like the U-Haul Art Fair and Platform, and alternative exhibition sites like Campus and The Bunker. Many of these efforts are designed to create space for sustained engagement, creative exchange, and deeper support structures beyond the cash-grab opportunities of the art world.

The next generation of gallerists is following a similar playbook. Facing mounting operational costs and a wave of established gallery closures in 2024 and 2025 (Marlborough, Venus Over Manhattan, BLUM, and Kasmin among recent examples), millennial and Gen Z gallerists have adopted a new strategy that prioritizes local engagement over scale, with fewer shows and art fairs per year. Their roster of artists and collectors might be a bit smaller, fostering a community rather than maximizing transactions. Tim Schneider, founder of The Gray Market newsletter, coined this approach the “post-imperial [gallery] model.”²⁰ There’s also a growing energy outside of traditional art world hubs where markets are saturated and living costs are high. Last year, Maine was touted as a new art world hotspot; earlier this year, Hauser & Wirth announced a new Palo Alto location;²¹ and the 2025 Upstate Art Weekend in Upstate New York was its largest on record.²² These are all signs of a market seeking fresh ground.

This moment presents collectors with an opportunity to reimagine their role, not just as “buyers” but as long-term supporters and stewards of cultural production. Many have embraced a more holistic, values-based approach to collecting and, in a moment of transition, are helping to build a more resilient art world that prioritizes the makers first. 

Source: https://www.privatebank.bankofamerica.com/articles/art-market-fall-update.html?sf278602346=1