"The bears really bring good things to market, so the highest-ticket items are coming out of the woodwork now, arguably even greater trophies than in the past few years that could garner even greater record prices," he says. It just came to light, for example, that private-equity mogul Henry Kravis has asked Sotheby's to sell a Degas pastel estimated at $40 million.

While the economic crisis may be more severe than downturns in recent memory, in a note published on October 14, Koerber argues that the art market did not screech to a halt during the last economic slowdown. And when the art world hit the skids in 1998, it was the first round of sales that were the worst.

Meanwhile, as the market deteriorates, auction houses are taking steps to protect themselves. As they jockeyed among themselves to snag the most desirable pieces over the past several years, they offered sellers guarantees: agreements to buy the work in question at a set price even if it did not sell at auction.

Koerber says that practice is dying down as the companies become more risk-sensitive. The auction houses have chosen to offer more favorable terms of sale to buyers, extending longer payment plans but also more carefully checking the financial positions of prospective buyers before the sales.  

Auction houses are also likely to shave down performance-based bonuses, according to Koerber, which is their biggest variable expense. Last year Sotheby's gave out $66 million to employees this way; during the last art-market downturn, the number was $10 million to $15 million.

Looking forward to the big auctions in New York in November, George Sutton, a senior research analyst covering Sotheby's for Craig-Hallum Capital Group, believes that sales for younger, unproven artists may see declines; however, he thinks demand for master works will remain high thanks especially to Middle Eastern and Asian buyers, who are still cash-rich and could become more active as prices drop.

"The quality art works by blue-chip artists will sell, perhaps even above the estimates, and maybe set records," says Cassie Rosenthal, co-owner of the Goff & Rosenthal gallery. "But works that do not really stand out or aren't very strong examples will most likely pass."

Both Rosenthal and Sutton think that investors are overestimating the impact of a recession on the art market. Sutton says that judging by the share price of Sotheby's, "anything better than terrible" at the auction houses in November will be viewed as a victory.