rollingrock said:"The economy is doing very, very poorly" does not make for a very good headline, now does it? The bottom line is, the irresponsible media plastering every medium of the media with "Recession" gets the general population into a kind of "the sky is falling" mentality that has the unnessary effect of convincing many of us that we are in a recession, when we aren't.I agree with this as well and people do need to be mindful that sensationalist reports about plummeting housing prices and difficult employment situation may or may not have anything to do with their situation locally. There is no doubt, however, that the scary housing reports (or welcomed housing reports -- it all depends on where you stand) coming out of parts of California, Nevada and Washington, DC have had a significant psychological effect on people, which has caused housing prices to drop in other areas without the same structural issues as the most hard hit areas.
This is not an entirely new phenomenon, however. For dozens of years now we have seen significant overcorrections in the stock market, housing market, etc... These overcorrections and the general hysteria that seems to overcome plenty of people out there and leaves them paralyzed is exactly the reason that many of us find wonderful buying opportunities during these events. For instance, as I've posted in this thread, we live in an area that did not experience the enormous run-ups in housing prices seen in California and Florida, so the housing correction has actually been quite modest. A month ago, however, we were able to close on a fantastic and very upscale house for only 5% more than the previous owners paid for it in '02 when they bought it brand new at a price that was pretty competitive at the time. The lender's own appraiser appraised it for a whopping 41% higher than our purchase price; the county's tax assessors have just estimated its value 36% higher than the purchase price (although this serves as further confirmation of the deal, I'll try to convince the county to lower it, so we can reduce our property taxes). This isn't exactly a starter home either, so this "discount" translates into very nice 6 figures.
I do expect to take a small bath on the sale of our condo that we now have to sell (still won't be a loss, since I bought it quite well -- the gain will just be small), but I fully expect the loss to be more than offset by buying a great house on "sale." We did not purchase the house for speculative purposes, however. We had just outgrown our condo and required much more space and different features. We will probably stay in the house for about 5-6 years, so even if my analysis is dead wrong, we will still do just fine when it is time to sell.
The point of my post is that instead of fighting all these "recession" labels that may or may not be applicable to your area, your time will often be better spent looking at these labels and at the mass hysteria as opportunities to improve your own financial situation, whether it be by purchasing assets at a discount, going back to school so you'll be more marketable in the future, acquiring recession-related skills at your job, etc...
