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.