Understanding the art market is really tricky since its one of the last unregulated markets. There doesn't seem to be any rhythm or reason to it. Here is what powerhouse art dealer Larry Gagosian says about it.
”The art market is actually not a market. It is too small to qualify as a market. And even if it could be understand as a market, it is unique in itself. No clear price comparison mechanism exists. For example, the ’art market’ does not adhere to the basic theory of ’supply and demand’. When prices drop in the art market, this is not a sign of increased demand, but rather, a sign that demand is decreasing. So, it must be understood that this means: dropping prices, even lower demand,” Larry Gagosian said during an interview with Adam Lindemann, an author and art collector.
Writer Donald Kuspit believes "that the irrational exuberance of the contemporary art market is about the breeding of money, not the fertility of art, and that commercially precious works of art have become the organ grinder's monkeys of money. They exist to increase the generative value and staying power of money -- the power of money to breed money, to fertilize itself -- not the value and staying power of art."