ART BASEL

If the bubble has burst, no one's told art buyers

What subprime mortgage crisis? Wealthy Americans continue buying pricey art, but galleries wonder when the economic downturn will catch up to their elite industry.

BY DOUGLAS HANKS

dhanks@MiamiHerald.com

The Basel bubble hasn't burst -- yet.

That's the consensus from galleries midway through Art Basel Miami Beach, who say the fair has maintained its signature sky-high prices despite the weak dollar and recession worries roiling Wall Street.

''The Americans are still buying,'' said Renee McKee, a New York gallery owner making her Art Basel Miami Beach debut this year. ``The American collectors are still in the market.''

The art fair -- where a $6 million Gerhard Richter painting seems like a bargain compared to the $30 million Picasso hanging nearby -- offers a weeklong barometer of one of the most rarefied sectors of the global economy. The contemporary art market has experienced both rapidly increasing prices this year and concerns of an imminent collapse.

Art consultant Karl Schweizer says the early signs suggest this year's Art Basel will mark a turning point, with sellers finally losing the upper hand to buyers.

''I know that, for example, people have made offers on lower levels and some of them have been accepted,'' said Schweizer, who is advising wealthy collectors during Art Basel for the UBS bank. 'I think we are at the end of a sellers' market and the beginning of a buyers' market.''

If that's the case, sellers aren't ready to acknowledge the shift.

In more than two dozen interviews on the floor of the Miami Beach Convention Center, gallery executives reported mostly brisk sales and said the contemporary art fair seems insulated -- so far -- from U.S. economic jitters. A weak dollar was expected to bring a surge of European buyers scooping up pricey art, but most galleries said American collectors continued to dominate the show.

Fredric Snitzer, owner of a Miami gallery, said he had no trouble moving an $80,000 Hernan Bas painting.

''Not only did we sell it, but we have 100 people lined up that would be willing to buy it at that price,'' he said. ``There's no way to call that a bad market.

Even so, there are signs that Art Basel Miami Beach may be losing some gravity in the constellation of art shows that have sprung up around the Swiss-based fair. Some dealers said they saw weaker demand for the young, lesser-known artists that are the staple for most of the two dozen competing shows in Miami and Miami Beach this week.

''Last year, for us, was better than this year,'' said Ricardo Trevisan, owner of the Casa Triangulo gallery in Sao Paulo, Brazil. He had not found buyers for three painted work shirts by a 39-year-old New York artist selling for $12,000 each. ''For the people that sell the big names, it's OK,'' Trevisan said.

SLOWER PACE

Others described a slower pace this year, with a flurry of sales during Wednesday's VIP preview, where the Art Newspaper reported that a 17-foot Andreas Gursky photograph sold for $900,000 to an American museum. But they reported a drop-off once the doors opened to the public on Thursday.

''It feels different from last year,'' said Tommaso Corvi-Mora, owner of a London gallery. While he said sales have surpassed the 2006 show, the buying seems to be ``less frenzied.''

Compiling a sales report card for the Basel show, which runs through Sunday, isn't easy: gallery owners have an interest in promoting the image of a vibrant seller's market, and anecdotal reports represent only a small portion of the 220 booths packed into the showroom.

But the scattered reports suggest Art Basel Miami Beach has largely defied two of the economic trends expected to play out among the Picassos, neon sculptures and a single framed Keanu Reeves publicity shot.

Along with the lack of nervousness among American buyers, several gallery executives also said they didn't see a surge of European collectors taking advantage of a weak U.S. dollar.

''It's an American fair this year,'' said Rachel Lehmann, a Basel Miami Beach veteran and owner of the Lehmann Maupin gallery in New York. ``It's very surprising.''

That assessment wasn't universal. Gianfranco Benedetti said his Italian gallery has sold mostly to Europeans. He suspects an unfavorable exchange rate is the culprit.

''Perhaps the prices are too high for the Americans,'' said Benedetti, of the Galleria Christian Stein in Milan. But overall he was pleased with his Basel results.

For those still waiting for a flood of deep-pocketed Europeans, their relative absence complicated the financial soothsaying underway in the art world.

Are Europeans spooked by the pricing bubble jitters that surfaced in New York last month when a Sotheby's auction produced less-than-anticipated bids?

Or are the Europeans just being priced out by Americans still eager to pay top dollar, as evidenced by later auctions that once again sparked acquisition frenzies?

''The buying is still very strong,'' said Georgina Adam, a reporter for the London-based Art Newspaper, which is producing a daily Art Basel edition. ``What is quite difficult to ascertain is whether it's the Americans or the Europeans.

''A lot of the reported sales have been to Americans,'' she continued. ``What's curious is the dollar is very low. And it doesn't seem to have translated into an inordinate number of European buyers.''

The art industry fears it may share the fate of the real estate market, where a decade of feverish price increases have led to a meltdown.

ART PRICES UP

Art prices are up 116 percent this year compared to 2002, including a 20 percent hike during the first half of 2007, according to artnet, a leading online price database. Veterans see fine art as a trailing economic indicator, one of the last to drop in a falling financial tide.

Ron Warren, of New York's Mary Boone Gallery, said the 1987 stock market crash didn't flatten his sales until 1989.

He hasn't see a hiccup during Art Basel -- he sold 40 digital prints by a single artist during the VIP preview Wednesday for $30,000 each -- but the seller's market has him nervous.

''The prices are crazy,'' he said. ``What's frightening is there's a consensus that the prices are crazy.''

Miami Herald reporters Jim Wyss and Mimi Whitefield contributed to this story.