The past few years have indeed been a glorious time in the art world. Amid the climb, those in the business of tracking art values have been “extraordinarily busy,” says Helaine Fendelman, a New York appraiser and author of a series of price guides. Some collectors have had their works reappraised for insurance purposes as often as twice a year. But collectors who have become accustomed to perennial increases may have forgotten the volatile nature of the market. Since the summer, Fendelman says, she’s turned cautious with her numbers. Recently asked to value a wealthy estate, she researched a small collage by Op Art pioneer Victor Vasarely. The artist is out of vogue in the U.S., but sales of similar Vasarely works in Europe had ranged from $12,000 to $37,000. “I appraised it at $15,000, figuring in costs of transportation and insurance,” she says, and to ensure “no tears” from the collector if the piece didn’t receive higher bids at auction.

Setting art prices, especially in this uncertain market, has itself become an art. Appraisers, like their counterparts in the real estate business, base their valuations on comparables—i.e., recent prices for works considered to be of similar value. But in today’s art world, what’s comparable? Marlborough Gallery recently offered a huge Francis Bacon triptych for sale. The priciest Bacon triptych ever, Three Studies for a Self-Portrait—a far smaller work than Marlborough’s—sold for $7.1 million at auction last year. Marlborough’s price was rumored to be more than $50 million. (A gallery representative declined to confirm this figure.)

So if a Rothko fetched nearly $75 million last spring, where does that leave Winslow Homer, whose 1881 Fisher Girls on the Beach, Tynemouth is on the block at Sotheby’s this month? Or Andy Warhol, whose portrait of Elizabeth Taylor will be auctioned at Christie’s? Or rising star Peter Doig, who has a few artworks on the block? (See “Anatomy of a Price Spiral.”)

Overhanging all the talk about prices is the concern that they will collapse. Traditionally, the art market shrugs off setbacks in the broader economy; in any recession, it seems, the rich are the last to become poor. After the stock market crash in October 1987, prices skyrocketed nonetheless in the fall auctions. Three years later, works by some artists had dropped 25 to 40 percent. The market for others disappeared altogether.

“The credit crunch is generating a certain amount of fear,” says Miami real estate developer and noted collector Craig Robins. But if nervousness has any impact on the prices for specific works, that could mean opportunity. Values for the work of certain painters—Robins cites veteran painter John Baldessari among them—have little correlation to the artists’ historical importance and thus present a bargain. Baldessari appears in every major art-history textbook, the Museum of Modern Art, and the Centre Pompidou, but a good Baldessari would cost about $575,000, the amount a collector paid recently for a work by graffiti artist Banksy. “People are treating artists like futures,” says Zach Feuer, a New York gallery owner whose clients include Charles Saatchi and Dean Valentine. “You see this reverse price structure, where a young artist is priced more because he might be the next Jeff Koons.”

The final arbiter of financial value is, of course, the Internal Revenue Service. It has a special advisory panel that reviews taxpayer valuations of expensive paintings, sculpture, and other works—generally items valued at more than $20,000 apiece. For 2006, it reviewed 1,638 items that it ultimately valued at a total of $219 million. (That’s up from the 687 items it valued at $115 million five years ago.) The values the I.R.S. came up with were often significantly different from the ones owners had originally declared. Many of the artworks had been donated as charity to museums, giving donors big tax breaks; the I.R.S. recommended cutting the total value of those works by 57 percent. But it recommended upping the appraisal of items in estates—which are subject to estate taxes—by 95 percent.

As the hammers come down at the auctions starting this month, the art world will be watching closely. So will the I.R.S.