Art market update: A turn toward untapped markets

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 underappreciated 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 trends

Masterpiece sales slow while the sub-$10 million 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

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

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.

Nontraditional 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. 

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,¹⁷¹⁷ 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. 

Artists often have little to no estate plan. Here are 10 questions they should ask themselves.

1. Have I considered my balance sheet and cash flow?

Think about whether there are sufficient investments, assets, and cash to sustain yourself and family members during your lifetime and if you pass away. You could run a cash flow projection to determine whether your investment allocation and projection are sufficient to support you and your heirs. Some of your wealth may be tied up in your art, which can be difficult to liquidate relative to other assets.

2. Have I drafted an estate plan?

Depending on what state you live in, this will be a will, a revocable trust, or both. If you don’t have an estate plan, your state of domicile will dictate who receives the assets of your estate.

3. Do I have a plan for my art?

According to the 2024 Bank of America Private Bank Study of Wealthy Americans, 78% of wealthy collectors believe it’s important to pass on artworks to their children and heirs, yet only 26% have made plans to gift one or more pieces to family.

4. How much of my estate will go to my heirs versus charities?

In many cases, artists will direct that some art assets be sold, others donated to charity, and still others left to family members. It’s important to document your wishes in your estate plan. It’s also important to consider how much estate tax will be owed. The passage of the One Big Beautiful Bill Act allows a $15 million estate tax exemption, beginning in 2026.

5. Have I named an agent and successors to act as my power of attorney?

This is for general financial matters and health care decisions. You may also consider naming a separate agent to manage your art inventory, sales, and intellectual property in case you become incapacitated. The agents you name will act only when, or if, you’re unable to act for yourself while you’re alive. You can make these powers effective immediately or only upon a determination of incapacity (usually by one or two physicians or a committee made up of family members and at least one physician).

6. Have I created an inventory of my art?

This could be a catalogue raisonné to document all the works you’ve created so they can be authenticated in the future.

7. Do I own works by other artists?

If so, how did you acquire these works? Did you buy them, or did you exchange them for other works? The acquisition date also matters — the Tax Cuts and Jobs Act of 2017 eliminated Section 1031 exchanges effective January 1, 2018. If you hold all artworks until your passing, you’ll get a step-up in basis to fair market value regardless of whether you exchanged such pieces or purchased them directly from the artist.

8. Are there pieces in my art collection at a low basis (purchase price)?

You may want to consider a sale of such artworks. When you pass away, these works will get a step-up in basis to fair market value as of the date of your death. This means that your estate can sell these works with no capital gain consequences.

9. Do I have a plan for my intellectual property?

Artists can bifurcate their intellectual property rights from their artwork when they pass away if the artwork is left to a related-use public charity. That way, they can transfer the intellectual property rights (copyright) to their family members, separate and apart from their artwork. The family members can produce merchandise that yields a revenue stream, while the artwork can be donated to museums or an artist-endowed foundation. That donation also yields a charitable estate tax deduction for the value of such artworks included in your estate.

10. Have I thought about my legacy?

This is one of the most important questions you should ask yourself: Who’ll promote your work when you’re no longer here? Consider naming an “art executor” or “art trustee” to manage all aspects of your art inventory under your will or trust when you’ve passed away. This individual can manage your brand, image and sales of your art, negotiate with the galleries who represent you, and enforce the terms of all contracts you’ve entered with collectors, galleries and museums. Many artists sign contracts requiring resale royalties, splits on sales of appreciated art, buy-one-donate-one rules, and more. Additionally, copyright infringement has become a significant issue for artists in the wake of AI. You’ll need someone to enforce such agreements on your behalf. 

Born in Chicago in 1925, Joan Mitchell moved to New York City in 1949 and quickly received attention for her work. She became an active participant of the New York School of painters and poets that included Willem de Kooning, Helen Frankenthaler, Lee Krasner and Jackson Pollock. Mitchell was included in the seminal 9th Street Art Exhibition of Painting and Sculpture in 1951, the formal debut of the Abstract Expressionists as a group. Though she was one of the few women artists in the male-dominated Abstract Expressionist movement, Mitchell abhorred formal art historical labels or being known as a woman painter.

Over 9 feet tall and 6½ feet wide, Sunflower II is an impressive painting that’s characteristic of Mitchell’s work after her move to Vétheuil, France, in 1968. By this time, Mitchell had developed a unique ritual that she called “framing,” her way of paring down memories of objects, colors, and experiences to a single image in her mind. Her colorful, gestural abstractions reflected her internal emotional and visual recollection of a landscape, as opposed to any mimetic representation of an actual landscape.

Sunflower II is an exceptional example of her method. Despite the title, we don’t specifically see a sunflower; rather, the thick magenta, cobalt violet and cadmium yellow paint against a white field, along with the expressive energy with which Mitchell painted in the quick brushstrokes and drips of paint, suggest the golden mustard color of sunflowers, and the vibrant teal may be Mitchell’s memory of an adjacent cool pond.

Mitchell is one of the 20th century’s most important artists. From the 1950s onward, museums such as the Whitney Museum of American Art, the Art Institute of Chicago, and the Museum of Modern Art began collecting her work. She was the first American woman artist to have a solo exhibition at the Musée d’Art Moderne de Paris. Mitchell made an enormous contribution to the field of painting that continues to influence artists today.

This unique work can be viewed at the North Carolina Museum of Art in Raleigh, where it’s on loan through July 2026.