London’s week of art auctions included dramatic sales, but the drama came from the least expected quarters. Art prices didn’t crash, and buyers didn’t flee. Instead, the art market continued to remake itself and find value in surprising places.

The key news out of London is that the art market is holding steady. Sales at Sotheby’s and Christie’s were higher than the previous auctions held in London during February. Christie’s Impressionist and Modern evening sale totaled about $207 million, and Sotheby’s comparable sale was about $230 million. For Christie’s, these numbers represent increases from last February but slight declines from June 2007 in London.

Sotheby’s, on the other hand, had its strongest Impressionist and Modern sale in London ever, 50% higher than February 2007. Christie’s sale this week was still nearly double the total of the same sale in 2006. Taken together, the sales for both houses represent a 10% increase over the previous June.

Many art world observers point to the Russians, still flush with cash from their natural resources, as the drivers of this market increase. With a pronounced taste for colorful, decorative art, the Russians seem to be avid consumers of Expressionist art. So much so that the sales may need to be rechristened with the genre “Expressionist” in the title.

At Sotheby’s, Franz Marc’s picture of grazing horses made $24.6 million; and Alexej von Jawlensky’s vibrant portrait of a girl, “Schokko,” was sold for $18.9 million. The owner of the Jawlensky had paid merely $8.3 million for the picture just five years before. Throughout the sales at both houses, Expressionist painters shot up in value. At Christie’s, Karl Schmidt-Rottluff had a sculpture estimated at less than $1 million sell for nearly $3 million, and a painting estimated below $3 million sell for $6 million. A significant figure in translating Fauvism into Expressionism, Schmidt-Rottluff was a founding member of Die Brucke with Ernst Kirchner. A major Kirchner sold at Sotheby’s fetched $9.6 million, well above the high estimate. Egon Schiele’s works at Christie’s also outperformed expectations. At both houses, works by Max Beckmann, Auguste Macke, Emil Nolde, Kees van Dongen, Max Pechstein, and Edvard Munch also sold above high estimates.

But don’t count the Impressionists and Modern painters out. Beneath the hoopla of Expressionism, there were important and surprising sales of Modern masters. Matisse’s drawing of a reclining nude sold for just under $6 million, more than double the high estimate. Works by Giacometti, Renoir, and Pissarro also doubled the high estimates to sell for $11 million, $15 million, and nearly $5 million each. Sisley, Bonnard, Picabia, and even Picasso broke through their high estimates.

The lesson of all these sales may be that the Impressionist and Modern categories have seen less pressure from sellers to drive estimates beyond demand. Sotheby’s won’t hold its Contemporary art sale in London until the very end of the month. But Christie’s Post-War and Contemporary sale showed the pitfalls of aggressive estimates. (And it is important to remember that the auction houses work with their consignors to determine estimates.)

Christie’s PWC sale showed that the auction house has reached a plateau with its London Contemporary sales. In February 2007, the evening sale grossed $138 million, and in June 2007 the total was $147 million. This week the sum was $143 million.

Christie’s marquee lots did not disappoint, nor did they excite. The Francis Bacon triptych that led the sale went for nearly $52 million, but not above expectations and with few bidders. A much-anticipated Gerhard Richter from his Pop art period sold well at more than $14 million, a new record for the artist at auction. But four other multi-million dollar Richters failed to find buyers (though another less common Richter went for more than expected). This seems to be a developing pattern where many Richters are offered and only a few are bought, but at record prices. Finally, a significant Basquiat sold for $13 million to a single bidder. These lots didn’t generate much of a frisson, but they did sell. Warhol had a bad week in London with three big pictures failing to find buyers, including a series of Jackie portraits. (Jackies have been on a roll up until now.) Damien Hirst also had some minor disappointments with a butterfly painting that didn’t sell and a spot painting that was hammered at the low end of the estimate.

The final glitch in Christie’s sale was the failure of the Rudolf Stingel paintings. Stingel has been setting gavels on fire in America for more than a year. But his secondary market may not be there in Europe yet. However, his fellow price rocket, Anselm Reyle, continues to sell well, as shown by the quarter of a million dollar sale as Christie’s first lot.

The hiccups shouldn’t overshadow the solid success of Christie’s sale, though. Lucio Fontana’s red painting with a single center slash sold for $13.5 million, a record price. Works by Andreas Gursky, Yue Minjun, and Hiroshi Sugimoto all sold for $1 million or more despite these not being major works and carrying much lower estimates. Yves Klein and Ed Ruscha had canvases that doubled the high estimates, as did Cy Twombly. Even a Warhol set of lithographs made a price well above the high estimate.