According to the Financial Times, the Mei Moses Index is releasing data  today that shows art prices fell 35% in the first quarter of 2009. This compares with 1991’s 41 percent drop for the entire year as the steepest fall on record.

The selling has particularly hit works by postwar and contemporary artists, they said. The Wall Street elite had favoured such works during a seven-year boom in art prices. The best performing postwar artist, Andy Warhol, saw a decline in the value of his work. A Warhol portrait of Mick Jagger sold for $1.1m in the quarter. The seller bought it in 2006 for $1.5m.

Postwar and contemporary art prices fell more than 30 per cent, according to the index, which combines New York and London prices. Such prices had enjoyed an average annual rise of 20 per cent for the past decade.

But let’s take a closer look as these numbers. First off, Mei Moses is based on matched-pairs transactions. That means to measure a sale Mei Moses must have information on a previous sale. The Mick Jagger portrait is a case in point. But the Jagger portrait is not a particularly important Warhol work. Few worksthat return to the market within a year or two of their auction purchase are likely to achieve a higher price–unless they are something quite sought after–because they’re not “fresh to the market.”

More important, the numbers being released must be based upon the London sales of Contemporary art in February. There have been no other significant sales so far in 2009. So we don’t know if that 35% number is an indication of the overall market, or justa measure of February’s sales.

Things could be far, far worse than that. The sample is too small and the method too limited to give us a real sense of whether there is a significant market for Contemporary art right now.

Also, there’s always a chance that the market isn’t as bad as those February numbers would suggest. But we won’t know that until May when we see some sales in New York.

Art Prices Fall 35% as Collectors Cash In (Financial Times)