As the spring auctions are getting lined up, collectors and wary dealers are treading cautiously.

‘Art Market Searches for Bottom’, a news report by Kelly Crow recounts how Sotheby’s stunned the world of art just three years ago by selling a Pablo Picasso painting for close to $100 million. Ironically, the leading auction needed to sell almost everything in its recent sale of Impressionist art to scale that target.

Top auction houses including Christie’s International, Sotheby’s, and the smaller one Phillips de Pury & Co. are desperate to protect price levels for the world’s top artists at their upcoming sales events. With the recession in full swing, wealthy collectors are in no mood to relent. The auction houses are preparing for tough season ahead.

The catalogs are now much thinner as compared to those three years ago. Sotheby’s expects to fetch sales in the range of $179 million and $256 million at its spring sales, down from $742 million achieved at its auction last spring and $411 million last fall. Sotheby’s got almost four times more money for tops works from the same series couple of years ago.

For the past few years, an influx of newly rich buyers spurred art prices to phenomenal highs, with artists like Mark Rothko, Andy Warhol and Francis Bacon, commanding prices well above $70 million. Collectors shifted assets from housing and stocks into tangible assets such as gold and art. This pattern has historically caused the art market to somewhat lag behind other major financial markets by at least a year.

Buyers have though, now become circumspect; contemporary art has dropped in value by a third, even while the Dow Jones Industrial Average has inched up. At next few auctions, strong sales could well restore some confidence in the art market. Conversely, it could be shaken further if with failure of the auction houses to entice their top clients.

http://online.wsj.com/article/SB124113524261575289.html

http://www.nytimes.com/2009/04/26/arts/design/26private.html?ref=design