March 6 (Bloomberg) -- Sotheby's dropped almost 7 percent in New York after an art-market analyst said more than half of the contemporary-art lots offered by three major auction houses last month in London fell short of or barely beat their low estimates.

The London sales by Sotheby's, Christie's International and Phillips de Pury & Co. totaled 189.8 million pounds ($378.4 million) in February, the most for a series of contemporary-art sales in London.

At Sotheby's, about 60 percent of the items sold below or near their low estimates excluding fees, said Anders Petterson of London-based research company ArtTactic. The two other houses are privately held.

``Auction valuations of contemporary art are now out of synch with demand,'' Petterson said in a report published today.

Sotheby's was at $29.09, down $2.16, or 6.9 percent, at 11:51 a.m. in New York Stock Exchange composite trading.

ArtTactic applies stock-market-style analysis to art sales.

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net.

Last Updated: March 6, 2008 12:04 EST