According to The Wall Street Journal, industry observers are predicting that the recent explosive growth in the art market could be reversing.

The Journal reports: "The sheer volume of works planned for sale is fueling the nervous buzz. Christie's has estimated the works it will have on the block at its major London sales in October at $154 million -- compared with the $83 million it made at those sales last year and $33 million in 2005. Sotheby's is selling 387 works at its London auctions next month, compared with 254 last year and 206 the year before."

Subprime woes and reduced Wall Street bonuses may have reverberations in the art market. Last week I wrote that hedge fund honchos are getting cheap -- no longer shelling out for the pricey real estate like they once did.

It looks like the art market could get very weak. The combination of hedge fund/private equity bosses becoming suddenly tight-fisted, and the potential for a supply glut could spell trouble.

But so far, the stock market doesn't appear to be worried. Shares of Sotheby's (NYSE: BID) are pretty close to an all-time high, but have exhibited great volatility during past periods of economic weakness. After reaching into the $40s in 1999, shares of the auctioneer sank into the single digits in 2002, perhaps aided by a price-fixing scandal.

Is the art bubble bursting? originally appeared on BloggingStocks on Sun, 23 Sep 2007 15:40:00 EST. Please see our terms for use of feeds.