If you're receiving mixed messages regarding the economy lately well join the club. The Canadian economy is performing brilliantly right now, the best in the G8 or is it the G20? The first quarter GDP came in with an amazing and unforeseen 6.1 per cent growth. Although inflation isn't a problem yet you can bet that interest rates will rise if our economy maintains this torrid pace. On the other hand if you believe the news, the crisis involving Greece and other members of the European Union threatens to plunge us into the second half of a double-dip world recession.

It's true that Canada did weather the storm better than just about any other country during the recent economic crisis and our current economy is the leader of the pack (vroom, vroom).But the thing that scares me is that by way of various stimulus packages we spent our way out of trouble thus increasing our debt load. That's like renovating your home because you can't pay the mortgage. 

On the local scene the average sale price of MLS listings has never been higher but have prices really increased 14% since last May or is it just that more expensive homes are selling right now? I expect the latter. The remainder of May's numbers indicate a downward trend in our local real estate market. In fact the market peaked in March this year and has been steadily slowing ever since. The impending implementation of the dreaded HST likely has a lot to do with the early spring market and subsequent slide and one has to question the wisdom of implementing such a harsh tax when the economic outlook is still a little shaky (Dalton?). 

So sales are down, inventory is up and homes are selling slower and farther away from asking price. Is the market getting ready to tank again or will it bounce back in the fall? I guess it depends on who you're talking to. I expect the slow-down to continue through the dog days of summer and then if things have stabilized in Europe by then I think we'll see the market rally a little as the leaves begin to turn colour. I don't expect prices to go down over the long term but I don't think they'll go up much either. This stagnant market should remain until the end of 2010 and quite likely well into 2011. The moral of this storey, if you have to sell, don't drag your feet! Your strategy should be to sell before the end of June. If you're thinking of buying, take your time and wait for the right home at the right price. If you want to buy and sell, you have nothing to worry about. No matter what the market is doing, things will pretty much even out for you.