Higher interest rates and energy costs, and reduced refinancing activity are also taking a toll on consumer spending, which has sunk from about 3.9 percent in 2004 to a current level of about 3 percent.
"We don't believe the housing market is going to fall off a cliff. We don't really subscribe to the hard-landing story," said Stuart Gabriel, Lusk Center director, during a presentation Thursday at the annual PCBC event, a conference for home builders held at San Francisco's Moscone Center.
This is, however, a time of "stagflation," or economic stagnation coupled with inflation, Gabriel said, and the real estate market is losing steam — with a general slowing in price-appreciation and sales.
Despite this, Gabriel said it's unlikely that there will be a major shrinkage in house prices, given the strength of employment numbers. Interest rates, though marching up, are not high by historic standards, he said.
The situation was a lot different in the early 1990s, when job losses contributed to a major downturn in the real estate market. Gabriel said that the impact of job losses in the aerospace sector hit Southern California's real estate market hard during that period.
"Barring that sort of event we don't expect significant falloff in house prices," he said.
While the prices in Kitchener Waterloo are nowhere near the astronomic numbers they have in San Francisco, the markets are behaving in similar ways.
While many of my colleagues are still adamant that we have a red hot seller's market, here at The Home Team, we track the markets using our exclusive Housing Index.
Seen the last Housing Index was published (the 19th I believe), we've seen the rolling 30-day closed sales jump from 417 to 499, but at the same time the active listing inventory increased from 1296 to 1350.
While a good number of homes are selling every month, there are more and more homes available on the market, Make sure you're Realtor knows how to make your home stand out.