I'm an optimist by nature, Anthony; but my optimism is reserved these days for the occasional "pleasant surprise." I also came into Connecticut Real Estate in 2006, having been through the previous recession ('79-'85) as a real estate broker in Florida. So, the "slow dip" you describe here in CT in 2006 felt to me then like deja vu. Anyway, my entire real estate career has been a recessionary experience. But this time around, I decided to work exclusively with buyers (since the law now permits that) and develop a more uniquely focused area of expertise, and I figure recession's a great time to try something new.
Also like you, I've experienced multiple offer situations and quick sales in the midst of this disastrous economic scenario. And while buyers are surely looking for bargains (who wants to be in this kind of a mess 5-10 years down the road, after all?), I have found many exceptionally well-priced properties I've encouraged buyers to consider coming as close to list price as comfort permits--and sooner rather than later. I'm afraid I believe that buyers in general are still a little uncertain about future--their own and that of the real estate they hope to own--particularly so for first-time buyers, but also a good-sized cadre of potential sellers who struggle between the growing cost of "staying put" and the desire to downsize (if only for financial reasons).
And in the midst of all this, we have to consider the devastation so many sellers are experiencing with foreclosures looming and short sales still very difficult and sometimes impossible to maneuver toward a satisfactory outcome. Not to mention the downward pressure all of that places on the surrounding marketplace values.
The "news" about the state of real estate, which arrives in my mail every morning is likely no less conflicting than that which my buyers are reading--and sellers, too. I think buyers & sellers alike probably read into such "news" their own personal degree of hope-slash-anticipation for what is to come. All I can say is I believe there are plenty of great opportunities for buyers to accomplish their buying objectives with confidence and plenty of sellers who would be happy to oblige for perfectly valid selling objectives (which surely include their own subsequent housing needs and requirements).
My take is that we'll be jiggling this thing loose for some time to come--one buyer at a time. But I do believe the jiggling loose has begun.