to answer the question

Are we headed towards a recession?

by definition are we in a recession? NOT RIGHT NOW.
do i see things getting better or worse in the near future? worse
do i think that by definition we will go into a recession? yes
will things rebound? yep
do i love selling re and will do so regardless of what is going on? yes
will homes still sell? yes
will you be the agent selling hte home?<<<<that is the real question!

Rough times...yes.

Depresion...no.

There are too many safeguards in place for a full blown (soup lines, 25% unemployment, etc.) depression to happen.

AIG blew through the 85 billion pretty freakin fast and are back for another 35 billion yesterday and oops! today its 40 billion more that they need. The fed is thinking of taking an equity stake in the banks, and are trying to figure out which ones are worth saving.

Yeah we aren't in a recession yet (sarcasm). This idea that someone came up with that a recession has to be two consecutive quarters and then maybe we can call it recession wasn't thinking in the terms that a huge multi billion dollar company could be looking good on Monday and bankrupt on Friday. We are living in different times. Hope for the best and prepare for the worst.

Not to beat a dead horse, but the generally accepted 'official' definition of recession is two quarters of declining GDP. Of course, we can find all sorts of definitions, some so broad as to be almost meaningless. Here are just a few...

Years ago I was told that a recession is when your neighbor is out of work but a depression is when you are out of work. ;-)

LOL so true

If I do not put a deal together soon I will be in a depression!!!

Depression no, recession yes. Although our government insists in calling it de-acceleration of the economy.

This is going to be the deepest and longest recession since the last depression.

I don't want to be doom and gloom, and I do believe we have a very strong and dynamic economy, but there are some major issues here.

The American economy depends on the American consumer. The American consumer has come to depend too much on credit to finance any major purchase. That credit has come from the banks, who are now holding the money out of fear of losses from mortgages.

Its not going to get better any time soon as now 1 in 10 mortgages in this country are delinquent.

We're in the 2nd part of the cycle here. The first was the financial collapse. The 2nd is the painful shrinking of the economy as less money is lent to purchase less goods, requiring fewer workers, which then leads to even less demand.

The regular economy is not going to get back on track until the banks do. And the banks aren't getting back on track until mortgages do. And right now delinquencies are still growing.

While this won't be anything like the 30's, this will be the great depression of the modern era. And that's not even taking into account the effects of another major terrorist attack or unforeseen calamity.

whatever we call it, what's most important is to understand why it happened, and change our mentality so that those conditions are not repeated in the future. the sad reality is, Americans are just too greedy. the world has changed. we no longer have the manufacturing base we did in the past, nor the near-monopoly in various industries and markets. the trade defecit and huge national debt are driving this country to the brink of disaster.

I'm going to be a bit contrary . .

I'm rather optimistic about the next 12 months.

It is clear that we've taken some hard hits. But, I suspect the worst is over.

* The stock market seems to have set a floor. Typically, in a bear market, it dives on the front end and then moves up a bit. We got down in the low 7000s with the Dow Jones Industrial average. Today we are in the high 8000s. It will probably bob around but I think we've seen the worst.

* The fall in oil prices is pumping larges sums of money back into the economy. Gas prices are now at lows we haven't seen for more than 4 years. And, indications are that the per gallon price is moving toward the one dollar level.

* Other commodity prices have come down dramatically. The huge run-ups the past year in things as varied as wheat, cheese, and metals were fueled by rising energy prices, percieved shortages and speculation. All have now dissipated. Food prices are starting to fall. Production costs for manufacturing businesses are coming down. Combined with the reduction in energy costs, the impact is very similar to a massive tax cut.

* The billions infused into the financial institutions, the massive interventions of the Federal Reserve and actions by overseas governments are starting to filter through. Credit is still overly tight. But, that will ease. There is just too much money available to lend. The financial institutions need to increase their belief that they will survive and that things are stabilizing, but I predict a loosening of business credit, consumer credit and other resources.

* Our industry is where the problems started. I think that we have overlooked much of what has occurred on the positive side. First, there are far more efforts to modify loan terms to keep folks in their home. The HopeNow program is becoming real. More early counseling, more cooperation from lender. It'll never help everyone but every bit helps.

* Short sales are becoming easier (yeah, I know it doesn't appear that way -- but, anyone notice that many of the major institutions are starting to respond much quicker? I'm watching MERS, the single largest mortgage insurer. They've created a new program where they approach folks on the front end who are in trouble and recommend a short sale. They will pre-qualify the seller (ie. take the hardship letter, etc. upfront). Plus, do the appraisal/bpos up front. That means they will have the ability to analyze an offer faster and with greater certainty. They are just starting to move forward on this program. I think it is pretty good approach.

* There has been considerable discussion about driving mortgage rates down to 4.5%. Also, there is a push from the National Association of HomeBuilders, NAR, etc. to make the first-time home buyer tax credit available to all buyers and eliminate the repayment requirement. Any of these would give a boost but it is interesting to see what is happening right now: FHA rates yesterday were 5.25%. Conventional rates are softening. All this may pull some buyers off the fence. But, I'm more interested in the opportunity for folks to refinance. The current fall may open that possibility for the 75% of Americans who are on the upside on their property. That could infuse billions into the pockets of families. It won't help those who are upside down but, again, most houses are still on the upside.


Unemployment will continue to rise for awhile. That is the lagging indicator.

But, I think the seeds of recovery are being sown. My bottom line prediction is that we will look back in a year and say that the seeds for turnaround were sown late in 2008.

I'm not quite so optimistic. oil prices will rise as OPEC restricts production. we are now seeing a wave of layoffs by the big corporations, which will likely continue. banks are hoarding the free money they pilfered from the gov't. the auto bailout is stalled or dead. higher unemployment ahead. unemployed people means less purchasing power. did someone say "recovery" just around the corner? LOL.

Bank of America now planning to lay off 35,000 workers.

BOA's plan is over a 3 year period going forward.

So most likely if the economy improves they will scale back cutbacks.

I agree that if your core business is regular residential listings you will be in a world of hurt for awhile.

I do investing and sell to investors so my outlook rocks for the next few years.

There are plenty of investors ready with cash to pounce on properties.

let's not forget that the last wave of rate adjustments will occur in 2011, and a recovery would likely come one to two years AFTER that, if conditions are condusive at that time. so, short-term recovery projections (within 12 months) appear to be unrealistic.