As head of Sotheby’s 20th-century design department in New York, Zemaitis, 40, has overseen highs — the sale of Marc Newson’s Lockheed Lounge for $968,000 in 2006 — and lows: the dip in demand for contemporary work, as evidenced by recent sales. Here, he talks with Sarah Douglas about the state of a market that he has helped build while at Sotheby’s and, beforehand, with Phillips de Pury & Company.

Were there early indications of trouble in the market for 20th-century design?

In June we still had some very high prices, especially for George Nakashima. But they resulted from two-person bidding wars — wars without a depth of clients. The last of the trade speculation occurred in that sale. We started to worry. When were these guys going to exhaust their ability to protect certain designers whose work they were using to build their inventory?

How did the Sotheby’s October sale in London fare?

The works that did well were not overpriced in relation to the designer’s value to the design world. Tom Dixon did quite well because he has remained incredibly modestly priced for someone as important as he is. Zaha Hadid did terribly. With Ron Arad, the early work did well, the later work didn’t.

So you were able to adjust expectations, and estimates, for the December auctions back in New York?

Yes. And we cleaned up the various-owners sale. We thought the last thing this market needed, especially with Design Miami right before the auction, is another piece of contemporary design. Enough already.

What are the particular vulnerabilities of your department?

We’ve been hyped as the "what’s next" market. So then there was the problem of increased volume. Unlike other art markets, 20th-century design is a four- or five-auction-house battle. As prices started to rise, around 2002 to 2003, volume shot up.

And the collectors who initially accounted for the steep rise in prices haven’t been enough of a stabilizing force?

The ones who had really driven prices up were a handful of prominent contemporary-art collectors, like the Mugrabis or Peter Brant. But they got their fill. They got the pick of the litter: a Newson piece when it first came to auction, a signature Nakashima, a great Prouvé. Design collecting didn’t trickle down to the contemporary-art-buying group — to the hedge fund guys, for instance — the way people thought it would. Instead, as the floodgates opened, the field of buyers started to narrow.

What role did the trade play as the market heated up?

Speculation. Dealers started approaching me saying, "Listen, I bought this piece at Wright, or Rago, in the spring, and I’d like to flip it with you in the fall." Fundamentally, that shows there is not actually fresh collecting going on. They are just trying to cash in on a scheme that is starting to go down the hole.

Where do the fairs fit in?

For all the hype over them, the market was very auction-driven. Even at the height, design dealers were never selling out their booths the way art dealers were. At the same time that volume increased on the auction market, the number of fairs dedicated to postwar design exploded, and dealers felt pressured to participate in them. Dealers in 20th-century design are not, by and large, as well capitalized as contemporary-art dealers.

What is your biggest concern about the market right now?

I fear what my professional auction-house rivals will do. They have a huge responsibility here. They have to say no to high volume. They have to say no to getting too competitive in their heads — and that’s where it is — even over fresh collections of material in the postwar studio movement, because there’s not the level of buyers there.

Do you feel that you’ve made any mistakes?

At the height of the madness, the auction houses started reaching out to designers directly and saying, "Give us your work to put in our sale." I made that mistake at Sotheby’s and Phillips. Every time we did that, we got good publicity and we might have sold the piece, but the results weren’t that great. Auction houses are ultimately middlemen; our place in the world is to mine the secondary market, not the primary market. Will I continue to work with contemporary designers from time to time? Yes. If, for instance, I think it’s an important piece from the beginning of a designer’s work, absolutely.