The bottom line is that Warhol prices peaked at auction during May 2002. Sure, last November's sales saw a few prices that exceeded expectations, such as a Big Electric Chair that brought $4.9 million (Christie's, Nov. 2002). However, conversely, similar Warhol paintings brought less money in November than May.

For instance, in May, an 80 x 80 in. yellow Self-Portrait "Fright Wig" brought $3 million (Sotheby's, May 2002). Six months later, an 80 x 80 in. blue "Fright Wig" brought only $2.6 million. There was also a pair of 1967 Self-Portraits that came up during the same period. A 22 x 22 in. example sold for $1.7 million in May (Sotheby's, May 2002), but then another one brought just $1.1 million in November (Sotheby's, Nov. 2002).

Granted, one could make a convincing argument that the yellow "Fright Wig" was better than the blue one. You could also say that the 1967 Self-Portrait that sold in May was superior to November's. But even if that were true in both cases, they weren't that much better.

What's at work here? Until recently, Warhol could do no wrong. A year ago, the number of inquiries for Warhol's paintings became so overwhelming that it led Larry Gagosian to remark, "It's as if no other artist exists."

Part of the excitement was created by the long-awaited release of the first volume of the Andy Warhol catalog raisonn. This wonderfully detailed book, covering the years 1961-1963, revealed a surprising truth -- fewer Warhol paintings were created during that period than most people think. Dealers and collectors immediately speculated that the same might also be true with future volumes, and so now was a good time to buy.

Then, there is the Peter Brant factor. Currently he is one of the world's largest Warhol collectors. His Brant Foundation has impressive holdings, including 12 small Electric Chairs. Rumor had it that Brant was supporting Warhol prices at auction. Dealers point to the suspicious increase in value of Electric Chairs. At the beginning of 2001, the going rate for a small example was approximately $650,000-$750,000.

Then, during a June contemporary sale in London, a pink Electric Chair came up and soared to $2.4 million. Proving this price wasn't a fluke, five months later, a yellow one was sold at Sotheby's for $2.3 million (Nov. 2001). To put this into perspective, back in May 1990, a small olive green Electric Chair passed at $165,000 (Sotheby's, May 1990).

Another factor that led to the surge in Warhol prices was the retrospective that opened in October 2001 in Berlin. A quick perusal of the catalogue reveals that the vast majority of the paintings are owned by European and American foundations (Peter Brant was a heavy lender). Smart money said that with all of these Warhols permanently off the market, the future supply of major pictures is extremely limited -- which is true.

The show eventually traveled to the Tate Modern in London and then moved on to Los Angeles during the summer of 2002, conspicuously bypassing New York. To say that the City of Angels made a big fuss over the show was an understatement. The marketing of Warhol was so intense that the city council actually kicked in money to help with promotion. Hotels offered all sorts of Warhol packages.

The L.A. press did its part and featured a number of in-depth Warhol articles. The Los Angeles Museum of Contemporary Art, which hosted the show, stocked its gift shop with a mind-blowing assortment of Warhol trinkets. At least four local galleries mounted Warhol exhibitions. The hype went on and on.

Not long after the retrospective, even the United States Postal Service got into the act by issuing a Warhol postage stamp. Based on the 22" x 22" 1967 Self-Portrait, the so-called "Mum Voyeur," in which Warhol covered his mouth with two fingers, the stamp was an immediate hit and quickly sold out. In essence, Warhol had gone mainstream. The expression, "famous for 15 minutes" was now part of everyday jargon.

In the meantime, while all of this was happening, even the lesser works were bringing serious money. One had to look no further than the smallest of important Warhol icons, the 5 x 5 in. Flowers. By the end of 2002, dealers were asking as much as $50,000 for one with colored blossoms. Ten years ago, the price for these works would have been closer to $9,000-$12,000.

Of greater significance was the run up in prices on works from the 1970s. For years, collectors and dealers had overlooked the Skulls and Hammer & Sickles. Not long ago (during 2000), small Skulls traded at approximately $100,000. The current asking price is $300,000. About three years ago, small Hammer & Sickles were regularly offered at $45,000. Now dealers quote as much as $125,000.

However, the biggest gainers have been the small Maos. Painted primarily during 1973, the 12 x 10 in. Maos sold for $5,000 in 1986, $20,000 in 1987 (right after Warhol died), $115,000 in 1988, $15,000 in 1993 (the nadir of the art-market crash), $135,000 in 1996, and during the last round of sales, in November, an outstanding version brought a record $284,500 (Christie's, Nov. 2002).

One might argue that based on the above statistics, Warhol prices are rising. But they're not. There may have been a few surprises, but as mentioned earlier, prices in general have reached their acme. Whether it's "Warhol fatigue" or not, the word among dealers is that prices can't possibly go any higher -- at least not until the next boom.

What's more, expect the auction houses to be more selective about which Warhols they accept from consignors for the May 2003 sales. The auction houses are savvy enough to know that the current market is about connoisseurship. Gone are the days when people thought nothing of paying $41,825 (Phillips, Nov. 2002) for a Toy painting of a stuffed panda playing a drum.

A long overdue process has finally begun. Only those Warhols that are part of a historically significant body of work will continue to appreciate. The rest will retain their value or may even go down in price -- but they won't go up.

On a positive note, one thing that should help future Warhol prices is that the estate is finally running out of pictures to sell. As most people know, when Warhol died there were approximately 4,100 paintings left in his estate (plus numerous prints, drawings, and photographs). A large number of these paintings were given to the Andy Warhol Museum in Pittsburgh to form their collection. The rest have been gradually sold off to museums, collectors and a few fortunate dealers. Initially, the trade incorrectly saw this as a bottomless pit of Warhol paintings. They talked about an infinite supply of Jackies and Dollar Signs. However, by 2002, very little of any consequence remained in the estate. The Jackies and Dollar Signs are long gone.

Naturally, as someone who owns a Warhol painting (a small green "Fright Wig"), I would like to see Warhol prices stay strong. But I wouldn't want them to reach the stratosphere. When prices become too bloated, the pool of serious applicants shrinks. An artist can literally price himself out of the market. My intuitive feeling is that the current price level for quality Warhols is sustainable. As long as auction consignors don't become greedy by pushing for even higher prices and estimates, the Andy Warhol market will be fine.