Titled “Art Market Update Fall 2024: Opportunity Knocks?”, Bank of America’s latest report indicates that the art market will see an increase in collector engagement this year. The new “art market update” explains that improved conditions for buyers are due to lower auction estimates, gallery discounts, and recent interest rate cuts. These factors are energizing collectors as they prepare for the New York fall auctions and Art Basel Miami Beach.
“Collectors are more discerning than ever,” said Drew Watson, head of art services at Bank of America Private Bank, in the report. “They know that galleries continue to sell A+ works, but that terms are more negotiable on everything else. Collectors are using that knowledge to secure more favorable transaction terms: including skipping waitlists, eliminating resale restrictions and ‘buy one gift one,’ and, of course, price discounts.”
According to the report, the art market has shown signs of cooling. The first half of 2024 saw auction prices rising only 1% above their aggregated mid-estimates, the smallest figure in over seven years. Additionally, 32% of lots sold at the May auctions fetched prices below their low estimates, marking a peak in unsold lots since 2020. However, with competition at auctions waning, buyers now have more leverage to negotiate favorable prices and terms.
This is true on the primary market as well. For instance, at Independent Art Fair in New York, artworks typically priced between $20,000 and $50,000 were sold for between $10,000 and $20,000. Throughout the year, high-profile artists, including artists like Sterling Ruby and Pat Steir have seen a dip in prices in the primary market. Ultimately, this gives more collectors a chance to enter the market.
One key takeaway from the report is the notable momentum within the Latin American market. Sales of works by Latin American artists at Sotheby’s, for instance, increased by over 50% between 2020 and 2023, exceeding $250 million. The report highlights the record-breaking sale of Leonora Carrington’s Les Distractions de Dagobert (1945) for $28.5 million at Sotheby’s New York in May 2024. Meanwhile, it points to increasingly popular cultural events such as the São Paulo Biennial and ARCOmadrid as vital primary marketplaces for these artists.
The report goes on to note that young collectors are increasingly viewing art as a crucial wealth management tool. The value of the art and collectibles market is expected to climb beyond $2.8 trillion by 2026. This projection is supported by the fact that 56% of collectors now incorporate their art buying into their financial strategies, with a huge majority (98%) of younger collectors doing so. As the younger generations inherit the wealth of their parents, the report predicts that this financial strategy will continue to grow.
Election years tend to raise concerns in the art market, particularly U.S. presidential elections, which historically coincide with fluctuations in auction activity. Auction totals in the first half of 2024 were the lowest since the pandemic shock in 2020. The report notes that while some election years, such as 2012 and 2004, saw increases in November evening sales by 27% and 37%, respectively, others, like 2008 and 2020, experienced declines during global economic crises. With the U.S. elections in the rearview mirror, this uncertainty is now over, and the broader economic conditions will instead have greater influence on the art market.
from Artsy News https://ift.tt/TeK2Ltx
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