The slumping real estate market is illustrative of the effect it has on the economy as homeowners feel a negative 'wealth effect'

The slump in British Columbia's real estate market serves as a cautionary note for other provinces that are bracing for bumps in economic growth.

When homes slip in price, consumers rein in spending, producing a ripple effect on local merchants and slowing down the broader economy.

Jacques Marcil, senior economist at Toronto-Dominion Bank, points to British Columbia as a signpost that the rest of the country should pay attention to because the province's average resale home prices have fallen this year − the only province experiencing a decrease from last year's average.

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