York County, Maine MLS Listings up 60% from a year ago

In my opinion, the 2 most dangerous threats to the real estate market are:

• Supply and Demand - In July 2004, there were 2,200 home listings in York County Maine, and houses were selling briskly. July 2005 reflects 3,500 MLS listings and it's taking longer to move homes.
• Interest Rates moving to 7.5% to 8% for 30 year financing could impact our local markets by 20% or more. Many homes are up 70-80% in 3 years, so a 20% drop is very realistic over the next few years. If supply continues to increase we could see even more of a price drop.

My local real estate agent said the market topped in 2004, and based on his experience during the last market correction, we could prices slowly deteriorate over the next 3-4 years.