“As sapping as high oil prices are to consumers, the real reason behind the retail slowdown has been the end to the earlier housing price boom. We therefore think that consumers spendthrift ways are in need of a Bex and a good lie down. And that process has a way to run yet.
… If housing prices rev up sooner than we expect, or if housing construction returns to health sooner than we expect, then consumers may dust off their party hats. But we doubt the many observers who expect early turns on both these key indicators, so retail spending may stay below trend for a while as we work off the lingering after effects of the housing price boom.”
– Access Economics (“Stagnant house prices hurt retailers” – The Age)
So people think that if their house is now worth $100,000 more than it was a year ago, then suddenly they can go out and buy a new pair of shoes and an iPod. Weird.