Dazzling Picture: Boom in Art Market Lifts Prices Sharply, Stirs Fears of a Bust --- Many Executives Are Buying, Using Securities Profits; Galleries Are Proliferating --- Slow Art, Fast Art, Buckshot
NEW YORK -- When Victor Ganz started collecting Picasso paintings in the 1940s, the art world was a very small place.</br></br>"There were a dozen good galleries, all centered around 57th Street. It was accessible, like a small town in Maine," says Mr. Ganz, sitting in a cozy room hung with seven Picassos. "Everybody knew that Picasso was one of the great painters of the century, but nobody was buying him. Nobody was buying anybody. It wasn't fashionable to buy art."</br></br>Fashions have changed. "There are more people collecting art today as a percentage of the population than ever before, even during the Renaissance," says Leslie Singer, an economist and art historian. Some observers contend that collecting contemporary art has become so trendy that the boom has reached a level of hysteria almost guaranteeing a bust.</br></br>It wasn't supposed to reach this point. When the art market flourished in the late 1970s and early 1980s, economists cited the then-steep inflation and predicted that money would flow out of tangibles when inflation subsided. But in the art world, at least, it didn't happen. People continued to view works of art as good investments.</br></br>Then came the bull market on Wall Street. Art dealers expected the usual slowdown as investors plunged into stocks. But instead, art has become hotter than ever, partly because the securities boom created new legions of wealthy people.