One of my pet theories is that by the end of the decade, realtors will hold a similar position in the public's mind that junk bond traders did in the 1980s and trial lawyers did in the 1990s. If the real estate market really does crash, they will bear an enormous part of the blame for the way they shamelessly and irresponsibly helped inflate the bubble which began in the beginning of the decade ("Now is a great time to buy . . . or sell!").
So how bad is the housing situation? In my neck of the woods in Northern Virginia, I wouldn't say it's apocalyptic, but it's pretty bad. Stop on any corner in Old Town Alexandria and you can see three, four, or five For Sale signs, and once properties go on the market, they seem to be staying there for a long time. But elsewhere in the VA burbs, it's worse. To that end, check out this great site on the NoVa housing bubble. The percentage price reductions are kind of terrifying--lots of listing prices off 30+ percent from their prior sale prices 12 to 24 months ago.
Of course the NAR is already claiming that housing prices are totally going to recover in 2008!
5 hours ago