"This has been the tale of two markets this year," says Jeff Ellerman, vice chairman with CB Richard Ellis' Dallas office. "We had a great market for the first half, which was fairly resilient and with a good activity and deal flow, even as the rest of the country was suffering a downturn."Then came September and the string of bank failures. "Things ground to a halt," Ellerman says. "What we've seen here is a real significant decrease in the velocity of transactions."

"We're not frozen in Dallas, not yet," comments Mark Noble, managing director with Colliers International Dallas-Fort Worth. "But we're currently skidding and no one's certain what condition we're going to be in during the coming year."

Jones Lang LaSalle Inc. managing director John Alvarado agrees with his colleagues' assessment, saying the local market is contaminated by the country's economic downturn. Though the North Texas economy is diversified and not severely overbuilt, "everybody is anticipating seeing a little slowdown in the coming quarters," says Alvarado, who works from the company's Dallas office.

Still, not everything is on a negative path. Associate partner Tom Warren with Hendricks & Partners' Dallas office says the area managed to escape the over-inflated housing bubble that plagued other parts of the nation. "We didn't have the hyper-inflation in housing prices," he comments. "We also didn't have that situation in which all of our apartments were converted to condominiums." Nor is the Metroplex suffering from the so-called shadow housing market that is impacting Arizona, Florida and Las Vegas, he adds.

But what protected North Texas during the past year 2008 was a combination of high oil prices and positive job growth. And it's job growth, says CBRE first vice president Jake Marks, that continues driving the area economy. As a result, deal flow has remained stronger than during the early 2000s downturn. "There really wasn't anything there during the last downturn," Marks adds. "But we're still tracking in this market."

The job growth has also meant rental growth, which is good news for apartment owners. However Ryan Reid, CBRE senior vice president of multihousing sales warns there are a lot more units in the pipeline, and something to be watched. "If that job growth slows," he says. "It could have a negative impact."

Warren agrees, adding that with 19,000 units under construction, an inventory glut could be an issue. "Our crystal ball says we'll still gain between 50,000 and 60,000 jobs in 2009," he comments. "But nobody knows how broad or deep this recession will be. If oil prices stay down long enough, it will start tempering the number of jobs created here."

Out of all the sectors, retail, perhaps unsurprisingly, is the most negatively impacted and will continue to be so in 2009. CBRE research manager Steve Triolet says a lot of retail space was delivered in 2008. That, combined with retailers likely to declare bankruptcy in early 2009 will mean negative absorption. The retailers that are hanging on through the Christmas holidays now are likely to be gone in February and March of 2009, he adds.

"The malls will be particularly vulnerable," he explains. "Valley View (in Dallas) lost both Macy's and Dillards as anchors. When you lose big anchors like that, it's hard to replace them, especially in these times."

Other than retail, the remaining sectors should pick up later in the year. CBRE senior vice president Josh McArtor believes the level of shock is moving out of the market. As people understand the reality of the new pricing realm, he points out, things should move forward. "We're likely to see an uptick in volume in sales activity during the second half of 2009, once the smoke clears and everyone understand the new rules of the game," he comments.

But Hendricks & Partners' senior investment adviser Jay Gunn isn't quite ready to release a positive outlook, because he doesn't believe the market has hit bottom. "It's difficult to price things," he confesses. "The perception out there is we haven't gotten to the bottom yet. Until we do, it will remain difficult for valuation."

JLL's Alvarado agrees, suggesting that bottoming out will happen when distressed sales start coming to the market. We're getting closer to that point, he notes, but it hasn't materialized just yet. When it does, some significant transactions could happen in the latter part of 2009, with recovering happening in 2010 and beginning in 2011.

Meanwhile Ellerman, a self-proclaimed optimist, says he hopes the new presidential administration and efforts by the Federal Reserve and US Treasury to stimulate the new market will help. If that's the case, he adds, the second half of 2009 should see the area turning the corner.

"It won't mean a lot of transactional activity will neatly follow. That's wishful thinking," Ellerman comments. "But hopefully, by this time next year, we'll be looking back and saying 'wow, I'm glad we're past all of that.'"

Until that time, brokerage services will have to rely on other services to get them through. Noble of Colliers points out that auxiliary activities such as appraisals and consulting will be called upon in 2009 to help investors and renters work through the issues. Still, Dallas and Fort Worth are likely to be less impacted than other regions."It's a mixed bag of feelings," he acknowledges. "There is going to be a tremendous amount of economic pain in other states. I think locally we're in for a difficult time. But I'd rather be in Dallas than elsewhere."