'Knock on Wood'

Overall, Stevens said sellers are only hurting matters by rushing to sell now, amid fears that conditions will only worsen. Such actions will simply turn those fears into reality, she explained, because a glut of homes with 'for sale' signs keeps prices down, while giving buyers more reason to hesitate, which just deepens the cycle.

"More people are trying to sell because they fear what's coming - sellers are the ones panicking the market," she said, noting that her firm currently has about 130 listings, when it normally would have roughly 90. "If they would just stay put, the inventory would go down, buyers wouldn't have so much to choose from, and they'd bid against each other on houses."

Banking on It

While the residential housing market bears watching, so too does the commercial-lending realm; when conditions worsen, some business owners will put off expansion plans or investments in new equipment and facilities until they feel more confident about the future.

But thus far in '08, there has been little such hesitancy, said Boutin, who admits to being more than little surprised by the numbers recorded by the PeoplesBank commercial-lending department thus far this year.

"We're ahead of the pace for the past few years," he said, attributing this to, among other things, several strong sectors, including health care and education, as well as a manufacturing base that is considerably smaller than it was years ago, but still has many strong players that have flourished in niche markets.

"This market doesn't see as the highs or the lows that other areas, like Boston, do," he said, referring to the Valley's traditional performance during economic declines and upswings. "We're 'steady Eddie."'

Donna Bliznak, vice president of Commercial Loans at PeoplesBank, told BusinessWest that there isn't much, if any, speculative borrowing at present, but companies are responding to what they need in terms of growth strategies. She cited one manufacturer that secured $1 million for new equipment and another that borrowed $2 million to invest in new technology. "There's been a steady stream of business coming in the door."

Mary Meehan, another vice president of commercial loans at PeoplesBank, said the commercial real-estate market remains fairly steady, with many clients and potential clients looking for investment opportunities.

Still, all three bankers noted that it's early in '08, and many business owners are still analyzing year-end accounting statements. The next few months will provide a good barometer of overall business confidence, said Bliznak, adding that some sectors are more vulnerable to worsening conditions than others.

One sector that would certainly appear to be in harm's way is retail, and some components of this industry, especially restaurants, hotels, and other hospitality-related businesses, are being impacted as consumers tighten their belts.

Putnam acknowledged that seemingly non-stop gloom-and-doom coverage of the scene nationally tends to wear down consumers - "those headlines scare people"- but she is optimistic that the worse may be over, and some first-quarter numbers support her positive feelings.