A Look at How the Art Market Is Faring

Still, the art market is certainly showing signs of stress. The United Nations warned on Friday that the global economy is "teetering on the brink" of recession. With high prices for food and oil, tight credit markets and waning consumer confidence, it's unclear how fast or hard the art market will follow.

That the auctions were not a complete bust was "a great sign of relief," says Anders Petterson, managing director of ArtTactic. "However, the question, 'When will the art market fall?' won't go away. So, every auction season will be a test -- putting enormous pressure on the market ... It's when these expectations are no longer met, that we could be in trouble."

Michael Moses, a former New York University professor who developed an art-price index with colleague Jiangping Mei, says that if the art market follows its historical pattern, it still has further to grow. During the last art boom, from 1985 to 1990, the market grew at a compound annual clip of 30%. That was followed by a precipitous drop of 65% over the next five years.

By comparison, the market has grown at an annual rate of 20% over the last five years, indicating that it could expand further before it contracts, Moses says.

Still, "it's anybody's and everybody's guess to what the history and future relationship is," he notes.

Once a downturn begins, prices can tumble quite quickly and sharply. Here are some important tips for art enthusiasts to keep in mind when deciding whether to buy or sell in today's market: