If income falls off dramatically such as happened in the great recession, where is that money going to come from?

If you go into a recession loaded with debt, especially if that debt is financing non-performing 'assets' (student loans) you could easily get cut if you own property, have a few vacancies, mortgage/tax/insurance is due, and so is the non-forgivable student loans. 

I'm personally not interested in the typical 3 to 5 year deal, in case the next recession is severe, and the banks shut down loaning again causing defaults.

The more closer to the peak, it is better to pay off the properties, so you have a better position to ride out the next recession.

Is this the start of a gradual but sustained broader recession in the overall housing market?

They overpriced it at 139K and lost it during the recession.

The conservative guys will tell you about recessions and the safety of owning property outright and not over leveraging. 

Is there a lot of risk investing in properties now (high prices + potential recession)?

I'll wait and see.I am of the opinion that the recession won't be as real estate driven. 

I've devoured every book published by BP and am currently reading J Scott's e-book on recession proof investing.