After a dismal 2009, there is hope for the art auction segment. There was reason for optimism at in the past quarter, as the major houses started to move impressive pieces again, and momentum continued through the beginning of this year. Now, we're getting ready to move into the busy months of May and June. Unlike last year, auctioneers, collectors and dealers seem to be ready to play.

May 2008 was essentially the last hurrah of an art market rally that had lasted several years and created incredible amounts of paper canvas and bronze wealth. It was at this point that Sotheby's (BID) sold a fairly late triptych by artist Francis Bacon for an incredible $86 million to Russian billionaire Roman Abramovich, a transaction that has become the poster child for the excesses of the art market.

The art market spent a year and a half circling the drain. Signs of life at the end of 2009, however, have become a reality, with recent auctions at Sotheby's (BID) and Christie's (CRUPF) exceeding expectations and showing triple-digit growth from comparable auctions last year.

Overall, art prices last year were off around 50%, with the contemporary art sector suffering even more severe declines of up to 70%. With prices this low and a recovery taking shape, it's time for investors to get in, and it looks like we'll see an art rally this year.

If you were planning to sell that Damien Hirst in your closet to help pay the mortgage, think again. According to a recent piece in Portfolio, "To capitalize on the past few boom years in the art market, Hirst's studio churned out works at a speed that many feared would overwhelm demand, pushing down prices further."

Daniel Komala, president and co-founder of Larasati Auctioneers tells Bloomberg that art prices could fall 40% in 2009. Bloomberg adds that "Confidence levels in the contemporary-art market have fallen 81 percent since May 2008 and may take between three and five years to recover, according to a survey released by research company ArtTactic Ltd. this week. Almost half the respondents to the survey expected auction prices would fall by 30 to 50 percent from their May 2008 highs."

What is ailing the art market seems to be the same thing that's ailing housing. For instance: Speculative buying drove up prices for hot contemporary artists (or houses), leading to a flood of new works (construction) hitting the market. Then consumer confidence took a plunge and now people are freaking out.

Prices for more artists with longer track records -- like Monet -- are not expected to be impacted nearly as much. Shares of leading auctioneer Sotheby's (NYSE: BID) have already been pulverized by concerns about the market, taking another big dive yesterday. But with its solid balance sheet and strong moat, the stock might even be interesting as the ultimate contrarian play right.