Much of our wealth in the west is defined by the confidence the "spenders" have in their world. You know who I'm talking about. Economists call it consumer confidence. It's a difficult thing to predict. We know it exists when we spend like mad fools. The more others spend, the more we spend. Strength in numbers. When we "keep our hands in our pockets" and stop spending, same principal applies. If my neighbours stop spending, then they must know something I don't know so I must stop spending also.
Fortunately for all of us, this seldom lasts very long. The fact is we're a wealthy society and we like to spend. It gives us comfort to spend and we can't go for long without that fix.
Houses are still selling even though there are signs the economy is slowing down. They're just not selling as quickly. This is particularly true in the high priced market.
It all began in earnest with the dramatic jump in oil prices. It didn't take long for us to adapt to this new reality. Luckily, we have a short attention span. There are a lot of news items to absorb each hour/day/week so it's hard to keep one in our radar screen for long.
Now we have two elections to anticipate. The U.S. election will revitalize consumer confidence but not until the new President takes over. The anticipated Canadian election will also create a period of uncertainty but again, once it's over, even if the Tories are reelected with another minority, life will return to normal very quickly. Then, we will spend again and all will be well.
In the meantime, some smart or opportunistic house buyers will get themselves a very good house for a very good price over the next few weeks. These are people who are immune to the general economic climate. This will be the executive who is being relocated and has to buy. This will be the professional (doctor, teacher, academic) who's income is not affected by the economy in general. This will be the newly married couple who will buy their first house regardless of what's going on in the world.
This will be the person who does not read newspapers or listen to the news. Chances are, if they weren't told the economy has slowed, they'll spend as normal.