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Art market update: Searching for terra firma

Collectors can expect auction estimates to come down and galleries to bring lower-priced works to fairs as discretionary sellers wait until market conditions improve.

The Hollywood sign, seen from behind so the letters are backward, sits atop a hill at sunset.

Detail of Back of Hollywood, 1977, by Ed Ruscha. (macLYON, France. © 2023 Ed Ruscha) 

The art market correction is adjusting price expectations. 2023 saw the art market’s first contraction year since 2020 — a much-anticipated reassessment of the pandemic era’s indiscriminate and unprecedented highs. In 2023, global auction sales across all fine art categories decreased 27% from 2022, and the average price of an artwork sold at auction decreased by 32%, marking it the largest single-year decline for average sale prices in over seven years.1

Amid this drop, collectors saw a widening discrepancy between buyers’ and sellers’ price expectations. We also saw this supply-demand mismatch play out in the primary market as dealers at this past December’s Art Basel Miami Beach reported fewer sales than the prior year.2 While many works priced in the tens of millions of dollars went home with their respective galleries, most pieces that were offered at or below $100,000 sold fast.

Even the auction houses are responding to a leaner market. Following a 19% decrease in overall auction sales in 2023, Sotheby’s announced it would reduce the fee it charged buyers across all price ranges while instating a formalized fee structure for consignors — including a “success fee” for works sold above their high estimates. Whether the success fee incentivizes auction houses to set increasingly more conservative estimates or the new commission structure increases transaction costs for sellers remains to be seen. Also worth watching: Will the other auction houses follow suit? Only time will tell, but collectors can expect overall auction estimates to come down and galleries to bring lower-priced works to fairs as discretionary sellers wait until market conditions improve.

After several years of heady growth, auction sales dropped in 2023 despite a record number of lots brought to auction. Were prices too high, or were buyers fatigued? The art world is pondering the answer. The number of lots sold at auction in 2019 was 105,030, and total sales were $10 billion; the number of lots sold at auction in 2020 was 96,823, and total sales were $7.2 billion; the number of lots sold at auction in 2021 was 110,586, and total sales were $12.25 billion; the number of lots sold at auction in 2022 was 108,832, and total sales were $13.74 billion; the number of lots sold at auction in 2023 was 114,914, and total sales were $11.16 billion.

Industry consolidation will continue. This year, collectors should expect to face a shrinking pool of art world players, who will have to work overtime to garner business from buyers and sellers. In early 2024, Hindman Auctions based in Chicago, and Freeman’s, based in Philadelphia, announced they were merging to create Freeman’s | Hindman. The newly formed entity, which boasts the largest auction footprint in the US along with a partnership with UK-based Lyon & Turnbull, will be a formidable player in the middle market. Executives from Freeman’s | Hindman cited “an increasingly competitive auction market”3 as part of the reasoning for joining forces. This merger follows Bonhams' acquisition of four regional auction houses in 2022 and 2023. When not consolidating resources, auction houses, more broadly, are reducing head count. In 2023, Sotheby’s reportedly laid off several senior employees as well as staff from their NFT Art Auction Department. Phillips eliminated senior leaders and regional staff, and online auction platform Artsy had a round of staff cuts. Auction houses will reallocate head count savings into mission-critical investments, such as guarantees, that will help them win competitive lots or reassure cautious collectors in a down market. 

Rate cuts could spur investors. Bank of America Global Research expects three rate cuts by the Federal Reserve over the course of 2024,4 which should alleviate financing pressures on collectors and art businesses. And just as the anticipation of these cuts has fueled the capital markets this year, this bullishness may prompt collectors to increase their discretionary spending on non-interest-bearing assets like art and collectibles, especially in categories that experienced pullbacks last year.5 However, seller confidence and price expectations were shaky in 2023, when the appetite to sell fell by a third from the prior year.6 Lastly, decreasing costs of borrowing may lead some collectors to generate liquidity from their art collections through an art loan, enabling them, for example, to fund broader lifestyle and wealth-building objectives without having to sell art. While the art market typically lags behind other economic indicators, we remain cautiously optimistic about how rate cuts may impact collectors’ behavior in 2024.7

Some collectors might get off the waitlist. For collectors, 2024 should provide opportunities for long-awaited access to works and artists who have been much in demand. Following a quieter 2023 Art Basel Miami Beach, New York galleries are presenting shows with works at lower price points in the first half of 2024. This year’s winter and spring exhibitions, even at mega-galleries, kicked off with a group of fresher faces, including Abdoulaye Konaté at Lévy Gorvy Dayan, Julian Charrière at Sean Kelly, and Huma Bhabha at David Zwirner. For many emerging collectors, this moment represents a chance to be more selective instead of buying from a gallery’s program just to gain access to more coveted works. It could also mean finally getting off a waitlist or even the opportunity to negotiate better terms with a gallery (i.e., asking for a 10% discount, eliminating “buy one, gift one” terms and the like). While we do not expect steep discounts at galleries, now is not the time to pay a premium. Collectors should take advantage of this environment to access works off their wish lists during this quiet period.

Women artists are finally getting their due. Collectors are paying increased attention to the women in the room. Auction sales of works by women artists were up 10% last year to $788 million. This comes on the heels of two big increases in 2022 and 2021, which saw sales grow by 29% and 55% year over year, respectively.8 Although the top three women artists by sales were Yayoi Kusama, Joan Mitchell and Georgia O’Keeffe, some lesser-known, historically important women artists are receiving recent attention. One example is Joan Snyder, whose painting The Stripper sold for nearly half a million dollars during Christie’s fall 2023 auction —300% more than its high estimate. Snyder joins the ranks of other women abstract artists, such as Grace Hartigan, Lynne Drexler and Alice Baber, who worked during the 1950s, ’60s and ’70s and have only recently gained significant secondary market momentum. These artists have all reached their auction highs in the last two years.9 Last year, 14 of Hartigan’s works and about a dozen of Baber’s works sold for triple their estimates, and 63 works by Drexler achieved hammer price ratios that were nearly double their estimates.10 Interestingly, these women’s proximity to canonical artists (for example, Hartigan had a close relationship with both Jackson Pollock and Willem de Kooning, and Drexler studied under Hans Hofmann and Robert Motherwell11) may be one of the reasons for their particular appeal in a period of economic uncertainty. The recent emphasis on quality and narrative may continue to drive value-seeking collectors to focus on A+ works by underrepresented historical artists more broadly over B works by canonical artists: The entry price is lower, the market is not yet saturated and the proximity to the establishment still makes it a relatively safe bet.

Women artists finally see the spotlight  Works by women artists have been gaining popularity, with more than twice as many lots sold at auction last year than in 2020. In the meantime, sales have grown more than 120% since then, as value-seeking collectors search for A+ works by artists who have been historically underrepresented. In 2019, works by 398 women artists were brought to auction and generated $376 million in sales; in 2020, works by 431 women artists were brought to auction and generated $355 million in sales; in 2021, works by 527 women artists were brought to auction and generated $552 million in sales; in 2022, works by 741 women artists were brought to auction and generated $713 million in sales; in 2023, works by 1,018 women artists were brought to auction and generated $788 million in sales.


Why is luxury booming?

Dana Prussian, senior vice president and art services specialist, Bank of America Private Bank, talks about how her team works with collections outside of traditional fine art.


Q: Your team has built a reputation for working with top fine art collectors across the country. How do luxury collectibles fit into your offering?

A: When Bank of America first launched Art Services, it was in response to a recognition that art as an asset class often made up a considerable portion of our clients’ balance sheets. In many instances, luxury collectibles are no different. They represent both an allocation and a passion for our clients. While we do not lend against luxury goods, we often work with our clients’ luxury collections via Consignment Services. 

Dana Prussian, senior vice president, art services specialist, Bank of America Private Bank

Dana Prussian, senior vice president, art services specialist, Bank of America Private Bank

Q: Do you regularly sell luxury assets through Consignment Services?

A: We actually do! It’s become an unexpected but truly enjoyable part of my role in Art Services. Our Consignment Services program applies to many luxury goods as well: We build a full sales strategy for the client, get competitive bids from auction houses, negotiate the terms of the seller’s agreement, help develop a targeted marketing plan and ultimately see the sale through until the end. Historically, we have sold handbags, jewelry, collectible cars, watches and wine for our clients. 

Q: In what context do you typically see a client sell luxury goods via Consignment Services?

A: We see luxury goods come through for a number of reasons, including estate transfers and divorces, of course, but we’ve also seen a greater influx of interest since the pandemic. During this period, prices of many luxury collectibles skyrocketed. Everything from pandemic boredom to the bull market to low interest rates to buyers and sellers becoming increasingly comfortable with transacting online led to this boom. Many of our clients have wanted to take advantage of that price appreciation and to get access to our relationship with top auction houses through Consignment Services.

Q: Are collectors still transacting online post-pandemic?

A: More than ever. Many collectors, especially younger collectors, are now comfortable with the online platforms that were perfected in 2020 to 2021. In fact, in 2023 luxury collectibles accounted for the largest share of online sales at Christie’s, Sotheby’s and Phillips.12 The category “jewels and watches” accounted for 28% of online-only sales at those auction houses.13 The ability to transact digitally in that way is a key reason why jewels and watches auction sales grew 10% year over year at the houses last year.14

Q: In which luxury categories have you seen the most market movement?

A: Personally, I have always been most interested in the luxury watch and handbag markets, but it also happens that those are two categories that have seen incredibly interesting market movement over the last few years.

Luxury boom  Collectors, whether spurred by pandemic boredom, the bull market, low interest rates or a growing comfort with buying online, ignited a boom in the clothing and accessories and watches and jewelry areas of the luxury market. Since 2020, auction sales in these categories were up 98% to $1.85 billion in 2023. In 2019, luxury clothing and accessories and watches and jewelry auction sales were $1.04 billion with 19,784 lots sold; in 2020 those auction sales were $.93 billion with 18,334 lots sold; in 2021, those auction sales were $1.47 billion with 22,176 lots sold; in 2022, those auction sales were $1.74 billion with 20,807 lots sold; in 2023, total luxury auction sales were $1.85 billion with 19,733 lots sold.

Q: What do you mean by that? What’s happening in the luxury watch market?

A: It’s been fascinating to examine the luxury watch market since the beginning of the pandemic. When I talk about luxury watchmaking, I focus primarily on Patek Philippe, Audemars Piguet (AP) and Rolex. We were previously in the biggest boom in Swiss luxury watches. Between early 2020 and mid-2022, there was a surge to record-level pricing on the secondary market.15 The demand was consistent with what we saw across the board in art and collectibles: Wealthy consumers were sitting at home with money to spend.

Now the manufacturers are starting to see primary demand cool. The even sharper decline is in the secondary market. The market for secondary Rolex and Patek Philippe watches fell to two-year lows by the end of 2023. The Bloomberg Subdial Watch Index, which tracks prices for the 50 most traded watches by value in the secondary market, was down over 40% between its high in April 2022 and the end of October 2023.16 We are seeing collectors slow down their purchases on the heels of higher interest rates, inflation and geopolitical tensions. Of course, it’s not all bad news. The most in-demand models for these top brands still trade well above retail, no different from the most sought-after blue-chip art.17

Q: Are you seeing a similar dynamic for luxury handbags?

A: The Hermès market, long considered the gold standard of collectible handbags, tells a similar story in its initial surge but has played out differently from the watch market in recent days. During the pandemic, we saw an extraordinary increase in demand. Hermès sold 30% more bags in 2020 than in 2019.18 But unlike most of Hermès’ luxury counterparts last year, the brand beat expectations in 2023. Despite the same economic and geopolitical headwinds as the rest of the luxury sector, Hermès handbag sales in the Americas rose 20% year over year.19 In the primary market, the scarcity mentality — all known as the “Hermès game" — keeps collectors wanting more. In the secondary market, Hermès’ Birkin and Kelly bags regularly trade three times higher than retail, increasing their appeal even further.20 The brand is truly in a category of its own.

Q: What are your favorite buys for men and women in these categories?

A: All my answers are price and condition dependent, but for men, the Patek Philippe Aquanaut or an Audemars Piguet Royal Oak Perpetual Calendar have been popular for quite a while. Both watches strike the right balance of sporty but not overly casual. The ladies’ Patek Phillippe Nautilus is the crème de la crème of women’s watches on the market. For something sportier at a lesser price point, I also love when women sport a men’s Rolex Daytona. For handbags, an Hermès Kelly Sellier 25- or 28-cm in a durable leather, such as Epsom or Togo, and a neutral color like gold, gris or black, will never go out of style. You can wear it for decades and pass it on to the next generation.

Q: Are there any bags that have caught your attention lately?

A: While they are not necessarily top of my wish list, I do love a party trick. For me, the Chanel Lait de Coco milk carton bag definitely falls into that category. So does the Hermès Mini Bolide on Wheels. I love something whimsical and out of the ordinary that not everyone is carrying. Even better? Chanel and Hermès never go out of style.



10 Things collectors should know when it comes to private foundations


Two people observing art in a gallery

By Michael Duffy, head of Art and Collectibles Planning, Private Wealth Strategic Wealth Advisor for Merrill, and Rosemary Ringwald, head of Art Planning, Planning Center of Excellence, Bank of America Private Bank

Recommendation 1

Most family private foundations in the U.S. are not operating foundations. Instead, they are conduit organizations that must distribute 5% of their assets annually to public charities.

Recommendation 2

Private operating foundations, like Crystal Bridges and the Broad Foundation, are treated as public charities that run their own programming with employees on payroll. Donations of art or collectibles to a private operating foundation during your lifetime will provide for a fair market value deduction capped at 30% of your adjusted gross income with a five-year carryover so long as the private operating foundation puts the donated works to a so-called related use.

Recommendation 3

If you make a lifetime gift of art or collectibles to your family’s nonoperating foundation, you will only be able to deduct the lower of your cost basis or fair market value and the donation will be limited to 20% of your adjusted gross income with a five-year carryover of any excess.

Recommendation 4

If you give or bequeath art to your family’s private nonoperating foundation, the assets may be considered “nonrelated use” assets that must be added to the value of your foundation’s endowment or asset base, which will increase the amount of money that it has to distribute annually under the 5% minimum distribution rule. This could put a strain on the private nonoperating foundation’s financial assets and cash flow.

Recommendation 5

If fine art and collectibles are held by your family’s nonoperating foundation, the art and collectibles may have to be reappraised every year to compute the proper 5% minimum distribution amount. 

Recommendation 6

Consider the recurring costs of annual appraisals, property and casualty insurance, storage, etc., which could have a significant impact on your nonoperating foundation’s cash flow and balance sheet.

Recommendation 7

If you give your art and collectibles to your family’s nonoperating foundation, the foundation must take possession of those art and collectibles.  

Recommendation 8

You (and/or anyone in your immediate family) cannot lease back the art you donated to your family’s nonoperating foundation because it would violate private foundation self-dealing rules, which could trigger excise taxes and/or your foundation losing its tax-exempt status.

Recommendation 9

Private nonoperating foundations are prohibited from making risky investments that would jeopardize their ability to carry out their exempt purposes. Excise taxes could apply to both the foundation and the foundation manager if purchased and deemed too risky. 

Recommendation 10

However, investments that are transferred by gift to the foundation are exempt from the tax on jeopardizing investments provided the donor receives nothing from the foundation in exchange for their donation. 


Curator's Corner

Jennifer S. Brown, curator of Bank of America’s corporate collection, discusses Ed Ruscha’s Clock Speed (1986), and why it’s a compelling — and important — representation of the artist’s experience and vision.


A painting of an American flag flying in the breeze with a grid seemingly composed of small lights superimposed upon it

This monumental oil and enamel on canvas, Clock Speed 21 by Ed Ruscha, was painted in 1986, the same year it was added to the collection of Security Pacific, a bank acquired by Bank of America in 1992.

As an undergraduate art student in the late 1950s, Ruscha donned various creative hats, working as a commercial illustrator, sign painter, graphic designer and typesetter at an advertising agency. These diverse roles left an indelible mark on his artistic style, influenced in part by the groundbreaking work of Jasper Johns and Robert Rauschenberg, both of whom embraced found objects and everyday imagery, forever changing the trajectory of American contemporary art.

Jennifer S. Brown, curator, Bank of America art collection

Jennifer S. Brown, curator, Bank of America art collection

In an era before the internet and social media, Ruscha’s playful compositions reflect the relentless influx of mass media-fed images and information. His 1962 painting Large Trademark with Eight Spotlights was a standout in the “New Paintings of Common Objects” exhibition at the Pasadena Art Museum alongside works by luminaries such as Andy Warhol and Roy Lichtenstein. This groundbreaking exhibition is often said to the beginning in America of what we now recognize as pop art.

Ruscha’s visual language often included words as images, but by the 1980s, he also depicted symbols and familiar objects against evocative backgrounds, such as the flag against the gridded background in Clock Speed. Some say they see a flag reflected in the windows of a high-rise building. As a Los Angeles native, I see the flag fluttering almost collagelike against the grid of the city streetlights.

For Ruscha, the essence was to, in his own words, “successfully overlap two unlike ideas.” Clock Speed encapsulates this fusion, inviting viewers to unravel layers of meaning within its dynamic composition. It’s a visual symphony that transcends time and beckons viewers to engage with its dynamic composition, inviting a nuanced exploration of its layered meanings.

Bank of America is the national sponsor of ED RUSCHA / NOW THEN, recently on view at the Museum of Modern Art and opening at the Los Angeles County Museum of Art (LACMA) on April 7.




Bank of America in the art world

Each year, Bank of America provides funding for art and cultural exhibitions as well as grants for art restoration projects. Here are highlights of the bank’s exhibition sponsorships and grant recipients.


A woman sitting on a bench reads from a newspaper to two small children who are leaning against her.

Family Group with Newspaper (1936) 22 is one of the photographs by the renowned artist James Van Der Zee featured in the exhibition “The Harlem Renaissance and Transatlantic Modernism” at The Metropolitan Museum of Art in New York. Funding for the conservation of five Van Der Zee photographs in the newly opened exhibition was provided by a grant from the Bank of America Conservation Project. See below for details.

Bank of America’s grant recipients and exhibition sponsorships

Bank of America Art Conservation Project: 2024 highlights

Art and objects of cultural heritage are vulnerable to environmental factors and the impact of time. Conservation of these works allows communities to be inspired by the rich diversity of the human experience.​ Since 2010, Bank of America has provided grants for 237 projects in 40 countries to conserve historically or culturally significant works of art, including works that have been designated as national treasures. In mid-April, Bank of America will announce its 2024 Art Conservation Project grant recipients. Works recently conserved through grants from the Bank of America Art Conservation Project will be featured in several bank-sponsored exhibitions and special installations.


The Harlem Renaissance and Transatlantic Modernism
The Metropolitan Museum of Art, New York
Through July 28, 2024

Through some 160 works of painting, sculpture, photography, film and ephemera, this exhibition will explore the comprehensive and far-reaching ways in which Black artists portrayed everyday modern life in the new Black cities that took shape in the 1920s–40s in New York City’s Harlem and nationwide — the early decades of the Great Migration, when millions of African Americans began to move away from the segregated rural South. The first art museum survey of the subject in New York City since 1987, the exhibition will establish the Harlem Renaissance and its radically new development of the modern Black subject as central to the development of international modern art. Bank of America is a sponsor of the exhibition and also provided a grant for the conservation of five photographs by James Van Der Zee that are included in the exhibition.


A line drawing of a rearing horse

A section of Chiura Obata’s Two Running Horses screen (1932),23 which was one of two major works by Obata that were recipients of a Bank of America conservation grant.


Chiura Obata: Layer by Layer
Utah Museum of Fine Arts (UMFA)
March 23 – September 8, 2024


Chiura Obata: Layer by Layer” at the UMFA presents an in-depth look at the creation and conservation of Obata’s Two Running Horses screen. During its 2022 conservation treatment, conservator Yoshio Nishio discovered that the paper layers beneath the Horses screen contained full-size charcoal preparatory drawings of the horses. Additionally, the conservator found that the paper Obata used to build up the layers of the screen was full of artwork by the painter and his 1932 summer class students. The recently conserved screen and a new second screen of the full-scale drawings will be on display at this special installation along with a selection of the artwork paper layers. A documentary film accompanies the show, which allows visitors to see the conservation process — an art within itself.



Up Close with Paul Cézanne
The Phillips Collection, Washington, D.C.
April 17 – July 14, 2024

The exhibition will unveil two recently conserved works by French Post-Impressionist Paul Cézanne, Mont Sainte-Victoire (1886–87) and Self-Portrait (1878–80), major paintings that are part of The Phillips Collection’s world-renowned holdings by the revered artist. These paintings, together with five other works in the museum’s Cézanne unit, will be exhibited together for the first time in decades.

An art conservator wearing a magnifier headset does detailed work on a corner of a painting, Paul Cézanne’s Self-Portrait (1878-80).

A conservator cleans a section of Paul Cézanne’s Self-Portrait (1878–80), one of two important works by the artist that received conservation grants from Bank of America.

Bank of America’s support for important exhibitions


Bank of America provides funding for art and cultural exhibitions highlighting a diverse group of artists and art forms. Each year we support 10 to 15 exhibitions at major museums around the world. The following are some of this year’s highlights.


Jeremy Frey: Woven
Portland Museum of Art, Portland, Maine
May 24 – September 15, 2024

As the first-ever major retrospective of a Wabanaki artist in a fine art museum in the United States, “Jeremy Frey: Woven” is a groundbreaking exhibition in contemporary and Indigenous art. Featuring more than 50 baskets made from natural materials like black ash and sweetgrass, “Woven” presents a comprehensive collection that spans a career of more than two decades.

A top-down view of an elaborately woven basket in blue, black and cream

This detail of Blue Point Urchin 24 is an example of Jeremy Frey’s contemporary artistry within an indigenous tradition.



A slightly abstracted depiction of a cityscape with exaggerated perspective

The Shelton with Sunspots25 by Georgia O’Keeffe (1926) is one of many works the artist painted during her years in New York.

Georgia O’Keeffe: “My New Yorks”
Art Institute of Chicago
June 2 – September 22, 2024

Famed for her images of flowers and Southwestern landscapes, Georgia O’Keeffe spent several years exploring the built environment of New York City with brush in hand. The artist first moved in 1924 to the city’s newly built Shelton Hotel, then the tallest residential skyscraper in the world, and its soaring heights inspired a five-year period of energetic experimentation with subject matter, form and perspective across media and at a variety of scales.



The Hollywood sign, seen from behind so the letters are backward, sits atop a hill at sunset.

Back of Hollywood, 1977, by Ed Ruscha (macLYON, France, © 2023 Ed Ruscha) is one of the works shown at “ED RUSCHA / NOW THEN” at LACMA from April 7 through October 6, 2024.

Los Angeles County Museum of Art (LACMA), Los Angeles, California
April 7 – October 6, 2024

Spanning 65 years of Ed Ruscha’s remarkable career and mirroring his own cross-disciplinary approach, the exhibition will feature over 200 works produced from 1958 to the present in various media — including painting, drawing, prints, film, photography, artist’s books and installation. Alongside the artist’s most acclaimed works, the exhibition will highlight lesser-known aspects of his practice, offering new perspectives on one of the most influential figures in postwar American art.

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