Auction sales fall 6% in the first half, raising fears of an art market shift
Auction sales for the first half of the year at Sotheby's, Christie's and Phillips fell to $3.98 billion, a drop of 6% compared with the same period in 2024, according to ArtTactic. The auction total is the lowest in at least a decade (setting aside the 2020 pandemic) and is now down 44% — or more than $3 billion — from 2022. The declines follow a 19% drop in 2023 and 26% decline in 2024.
Postwar and contemporary art, which has been the main engine of growth for art auctions in recent decades, fell by an even greater 19% in the first half, according to ArtTactic.
'Lingering concerns over global economic growth, ongoing inflation, and rising geopolitical tensions are weighing on confidence and creating a more cautious investment climate,' ArtTactic said. 'These factors are likely to challenge the market's momentum in the second half of the year, as the industry adapts to a still-uncertain global landscape.'
Those lingering concerns, however, aren't showing up in other areas of the wealth economy. The prosperity of the wealthy is at record levels, with the top 10% of Americans adding $37 trillion to their wealth since Covid, marking a 45% increase. Stock markets were up more than 20% in both 2023 and 2024 and are up again so far in 2025. Housing values and business valuations have also soared, adding to personal wealth.
Yale professor William Goetzmann has studied the relationship between art prices and financial wealth going back over 300 years and found they are 'highly correlated.'
'Demand for art increases with the wealth of art collectors,' he wrote in his famous paper 'Accounting for Taste, Art and the Financial Markets over Three Centuries.'
With personal wealth at all-time highs, however, Goetzmann said the 300-year correlation is broken. He said there are one of two explanations for the divergence: Either the dip in the art market is a temporary aberration and will bounce back this year or next, or the art market is going through a more structural change.
'The question is, is there some kind of fundamental deviation from the social norm of the very wealthy being highly involved in collecting art at the highest prices and levels,' he said. 'We don't know yet.'
That fundamental deviation, if it's happening, may be rooted in the generational shift in wealth. For decades, the art market has been driven largely by baby boomers who built large art collections as their wealth grew throughout the 1980s, '90s and 2000s. Many of those baby boomer collectors are now buying less or downsizing. And a growing number are leaving estates with large collections to sell, since their kids often don't want the art.
At the same time, the new generation of wealthy — millennials and Gen Z — grew up in a more digital world and may not have the same tastes or interest in the paintings of 20th century artists. With over $100 trillion in wealth expected to pass mainly from baby boomers to the next generation, some experts say the art market may be showing signs of structural change and a more existential crisis.
The auction houses are racing to adapt with more online sales, luxury items and lower-priced offerings. Auction sales in the luxury category — including jewelry, handbags, wine, watches and sports memorabilia — grew 1% in the first half even as art sales declined, according to ArtTactic.
Jewelry is shining especially bright among young, female collectors as more wealth shifts to women. Jewel and jewelry sales jumped 68% in the first half compared to a year ago. Online auctions are also rapidly gaining share over physical auctions as younger collectors prefer to bid from their phones.
Total auction sales at Christie's were stable in the first half, thanks in large part to online sales and luxury. Its luxury sales, which also included classic cars, surged 29% to $468 million. Among the highlights: the Marie-Therese Pink Diamond, said to have belonged to Marie Antoinette, which sold for $14 million, and the 'Blue Belle' fancy vivid blue diamond went for $11 million.
The shine from jewelry and luxury goods is also helping Sotheby's, which sold its own blue diamond, the famed 'Mediterranean Blue,' for $21.5 million in May after a fierce bidding war.
Younger collectors are driving strong demand for collectibles priced under $100,000, with the most competitive bidding for works under $50,000. The top end of the art market, with lots priced at over $10 million, plunged 39% last year, while sales of works for less than $5,000 jumped 13%, according to the Art Basel and UBS Global Art Market Report.
Bonnie Brennan, CEO of Christie's, told reporters that the auction's house's chief mission is to offer the objects that its clients want today, and offer them at the right price — especially for the new generation of collectors. Fully 80% of its bids this year have been online and nearly a third of winning bids came from millennial or Gen Z buyers.
'We are showing great relevance to the younger generation, to millennials, to Gen Z,' Brennan said. 'It's something that's really critical to sustain our business going forward.'
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