BofA Art Market Update Anticipates Buying Opportunities for Collectors This Fall

Rhea-AI Summary

Bank of America's latest art market update reveals favorable buying conditions in the art market, with auction estimates lowering and galleries offering discounts following recent interest rate cuts. The first half of 2024 saw auction prices only 1% above mid-estimates, the smallest increase in over seven years. The Latin American art market shows particular strength, growing 18% year-over-year. By 2026, art and collectibles are expected to reach $2.8 trillion, comprising approximately 11% of ultra-high-net-worth individuals' portfolios.

Positive

• Latin American art market segment growing 18% year-over-year
• Art and collectibles market expected to reach $2.8 trillion by 2026
• Favorable buying conditions with lower auction estimates and gallery discounts

Negative

• Auction prices only 1% above mid-estimates, lowest in 7+ years
• Market correction continuing from 2023 into 2024
• Declining bidder competition in some market segments
• Galleries facing pressure to adapt or risk unsold inventory

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A recalibrating auction market, an increasingly global ecosystem and evolving wealth management strategies present opportunities and challenges

NEW YORK, Nov. 12, 2024 /PRNewswire/ -- Newly released Bank of America art market update finds that lower auction estimates, discounts at galleries and the recent interest rate cuts are driving increased participation among collectors heading into marquee events, including the New York fall auctions and Art Basel Miami. The anticipated favorable buying conditions come on the heels of lower-than-expected art sales in the secondary market during the first half of the year – with auction prices coming in only 1% above their aggregated mid-estimates, the smallest increase in seven-plus years.¹

The current market correction, which began in 2023 with global geopolitical unrest, high inflation and interest rates affecting collectors, has spilled into 2024. Less marquee estate property in the May sales potentially also dampened bidders' confidence and enthusiasm. Fewer masterpiece works are being offered in what has widely been viewed as a "buyer's market."

Galleries face a critical choice: adapt to the new market reality or risk accumulating unsold inventory. "Collectors are more discerning than ever," said Drew Watson, Head of Art Services at Bank of America Private Bank. "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.

While some auction prices soften and bidder competition wanes in some areas of the market, the report indicates strong collector interest in certain collecting categories, for example, the Latin American (LATAM) and Latin diaspora artists market, which is expected to carry into 2025. Sales in this sector have grown by 18% year over year and show no signs of slowing based on recent market activity and institutional support.²

"Latin American artists have seen strong buyer interest and sell-through rates so far this year," Watson said. "We saw multiple record-breaking auction sales in the spring, and biennales and art fairs have become key primary market platforms."

Report findings also show that collectors increasingly view art as an asset that is part of their overall wealth management strategy. By 2026, the estimated value of art and collectibles is expected to surpass $2.8 trillion and make up approximately 11% of the portfolios of ultra-high-net-worth individuals.³ Interest is only expected to grow as younger generations build and inherit wealth over the coming years.

Access the full Art Market Update Fall 2024: Opportunity Knocks? report to read more about evolving trends in the art market today, including key wealth planning insights, an in-depth interview with artist Amanda Phingbodhipakkiya, a discussion with Jennifer S. Brown, curator of Bank of America's corporate collection, and a look at the Bank of America Art Conversation Project (ACP).

Since 2010, the ACP has helped conserve over 260 critically important paintings, sculptures, archeological and architectural works in danger of deterioration.  More information about this year's recipients can be found here: Grants to Preserve Historic Art Awarded in 11 Countries by BofA.

Bank of America

Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumer and small business clients with approximately 3,700 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 58 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (NYSE: BAC).

For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom and register for news email alerts.

Banking products are provided by Bank of America, N.A., and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.

Reporters may contact:

Julia Ehrenfeld, Bank of America
Phone: 1.646.855.3267
julia.ehrenfeld@bofa.com 

¹ ArtTactic, "RawFacts Auction Review First Half 2024."
² The Art Basel and UBS Global Art Market Report 2023.
³ Deloitte Art and Finance Report 2023.

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SOURCE Bank of America Corporation

FAQ

What is the expected growth of the art market according to Bank of America (BAC)?

According to Bank of America's report, the art and collectibles market is expected to reach $2.8 trillion by 2026, representing approximately 11% of ultra-high-net-worth individuals' portfolios.

How much did auction prices increase above mid-estimates in early 2024 according to BAC?

According to Bank of America's report, auction prices in the first half of 2024 were only 1% above their aggregated mid-estimates, the smallest increase in over seven years.

What is the growth rate of the Latin American art market according to BAC's 2024 report?

According to Bank of America's report, the Latin American and Latin diaspora artists market has grown by 18% year over year.