"The phones haven’t rung all week," exclaimed one dealer on West 24th Street in Chelsea. "Everybody’s hurting, and if they’re telling you different, they’re lying!" The dealer added, "This is off the record."

Josh Baer, the art-market expert who publishes the email Baer Faxt, recently wrote that he has "definitely turned from a bull to a bear." He expects "fire-sale prices," with a 30 percent drop in both prices and volume. He predicts that "the strong will survive but the marginal may not."

A dealer on 57th Street, Frank Bernarducci, who has just opened an exhibition of classic Photorealist paintings by Richard McLean, said that the "bottom feeders" were already on the scene. "A collector came in and offered me $17,000 for a $35,000 painting. That’s less than half-price!" he said.

The view was rosier at another West 24th Street space, the Mike Weiss Gallery, which had sold all but one of the sophisticated, expressionist paintings of "Hobo Clowns" and "Girls with Animals" by 29-year-old artist Allison Schulnik, at prices in the $4,000-$22,000 range. "With the stock market sinking, people have no place to put their money -- so they buy art," he said.

"I prefer to be optimistic," said SoHo dealer Jeffrey Deitch at an art-and-money panel at Yale University Art Gallery last weekend, noting, in so many words, that "pessimism is catching." Deitch went on to say something about $1 million in sales being canceled in one week.

Market indicators are certainly not in short supply in our busy art business. Exhibitors at the International Art + Design Fair at the Park Avenue Armory, Oct. 3-8, 2008, reported good sales, with the Wexler Gallery from Philadelphia, in its first year at the fair, selling a pair of elaborately carved wooden doors from 1976 by Wendell Castle for $120,000.

Perhaps even more impressive, Wexler sold intriguing bench made of steam-bent oak strips -- a mashup of boat-building technique with Zaha Hadid-type biomporhism -- by the young artist Matthias Pliessnig for $28,000. 

Art auctions are another indicator, and the upcoming sales in November of modern, post-war and contemporary art are sure to be closely watched. In an email, one top auction expert remarked "we remain bullish about the market. . . but we’re pulling back from the overhyped, overvalued contemporary art, in favor of the tried and true."

The correspondent, who asked to stay off the record, added: "Is the press corps going to start writing the art market obituary again? They’ve done it every season for five years. It’s getting old, isn’t it?"

Sadly, the evidence is building that we do indeed face an art-market slump. Christie’s and Sotheby’s each held fall print auctions in London last week, and the results are illuminating. Christie’s sold lot total was 55 percent, and Sotheby’s was 60.5 percent -- both fairly low numbers.

Artnet print expert Deborah Ripley points out that prices have been sinking for Andy Warhol’s bellwether "hot pink Marilyn" print from 1967, catalog raissoné number 31, which in one year has fallen in price from $229,000 (Nov. 2, 2007) to $193,891 (Apr. 1, 2008) to $87,000 (Oct. 2, 2008). Of course, condition and other factors may play a role. Still, "Warhol print dealers are concerned," she said with notable understatement.

Another bellwether print in a different market, Pablo Picasso’s 1958 color linocut Buste de femme, d’après Cranach le jeune, has seen a similar dramatic decline, selling for about $190,000 in London last week, compared to a high of $657,000 at the celebrity Nasher sale at Sotheby’s New York last May. "The last time ‘Cranach’ was selling at this level was in the art-market doldrums in the 1990s," said Ripley.

Similarly, Sotheby’s inaugural evening sale of modern and contemporary Asian art in Hong Kong on Oct. 4, 2008, saw 19 of 47 lots fail to find buyers, for a sell-through rate of just under 60 percent. Despite the buy-ins, the top ten did include a new record for Liu Ye ($1,670,656) and two other artists. At the larger day sale on Oct. 5, 2008, 150 of 187 lots found buyers, or more than 80 percent.

The sell-through rate was also encouraging at Sotheby’s New York mid-season sale of Impressionist and modern art on Oct. 7, 2008, with 263 of 326 lots selling, or almost 81 percent. A new record was set for the avant-garde abstractionist Rudolf Bauer, whose Kandinsky-like Sinfonie 23 (1919) sold for $254,400.

As always with art, a few works do exceptionally well, whatever the overall economic situation. At Sotheby’s London print sale on Oct. 2, 2008, for instance, Roy Lichtenstein’s sexy Nude with Blue Hair (1994) sold for £163,250 ($288,969), well above the presale high estimate of £100,000 and a new high for the series.

The last time the art market experienced a marked slump was in 1989, about 18 months after the "Black Monday" of Oct. 19, 1987, when stock markets crashed worldwide, dropping more than 20 percent in the U.S. An art-market lag of 12-18 months behind the overall economy has since become an article of faith.

According to the Artnet Market Trends Research Group, the art market peaked in 1989 and bottomed out four years later in 1993, with prices falling, on average, a total of 56 percent.

Super-high prices continued to be reached at the top of the market in May 1990, when Vincent van Gogh’s Portrait du Dr. Gachet brought $82,500,000 at Christie’s New York on May 15, 1990, and Pierre-Auguste Renoir’s Au Moulin de la Galette sold for $78,100,000 at Sotheby’s New York on May 17, 1990. By the fall sales of that year, big Impressionist and Post-Impressionist prices had disappeared. Back then, Japanese buyers were a big factor, much as Russian and Middle Eastern buyers are today.

In 1989, the total lots offered numbered approximately 58,000 (including buy-ins), which generated $3.2 billion in sales. In 2007, 254,000 lots were offered, for total sales of over $10 billion. "Larger markets are harder to move," noted Kevin Radell, Artnet’s market research specialist. "Our index shows that in 2005, the art market slightly exceeded the 1989 peak. We are now roughly 50 percent higher than the ’89 peak. The market is much broader."

"I think the art market is going to continue to grow," Radell said, "though like any other asset category, it will have a correction. Plenty of high quality material should come to market, since people need to liquidate assets to raise cash, and also seek to sell while prices are still high. Sellers will want to keep estimates at reasonable levels, which should translate into buying opportunities. All this bodes well for the fall auctions."

For complete, illustrated results, see Artnet’s signature Fine Art Auctions Report.

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