Bill Doskoch, ctv​toronto​.ca

When you look at Toronto real estate prices and sales sta­tis­tics, it’s almost like there had never been a recession.

As 2009 wound down, home­buy­ers were par­ty­ing like it was late 2007, which illus­trates the V-shaped path the mar­ket fol­lowed when the reces­sion started to bite in the fall of 2008.

The reces­sion is gen­er­ally con­sid­ered to have started in Octo­ber 2008. For that month, the Toronto Real Estate Board (TREB) reported that Toronto real estate sales were down 35% over the same period in 2007.

Toronto aver­age home prices were down 13% over the same period in Octo­ber 2007, while 905 homes prices declined about 8%.

But if you look at the median house price for a detached GTA home, it only really col­lapsed in Decem­ber 2008 (the median is the price point at which 50% of homes either sold for above or below that fig­ure. It’s less prone to dis­tor­tion than the aver­age price):

* Octo­ber 2008 – $377,000
* Novem­ber 2008 – $379,000
* Decem­ber 2008 – $300,200
* Jan­u­ary 2009 – $365,000
* Feb­ru­ary 2009 – $370,000

The median price con­tin­ued to rise through­out the year, end­ing at $445,000 in Novem­ber, 2009 (the Decem­ber fig­ure will be avail­able in early January).

“I find it very strange,” con­sul­tant Barry Lyon told ctv​toronto​.ca.

When 2008 ended, Lyon said he was very con­ser­v­a­tive in his fore­cast­ing of Toronto condo demand for 2009 – but he had to revise it upwards three times.

“I’m happy to be low, I’ll tell you, but I don’t know any­one who didn’t think we were in more of a U-shaped reces­sion rather than a V-shaped,” he said. “I think we’ve all been quite amazed by the strength of the recov­ery and how quickly it’s happened.”

Com­ment: I was not sur­prised. I have been say­ing this would hap­pen since around Octo­ber 2008. And I said the experts would be proven wrong. Peo­ple who are out there every day, who do this for a liv­ing, they are the ones who know what is going on. Those who sit back and make com­ments based on stats and papers are almost always wrong. They are the same ones who pre­dicted the col­lapse of the Toronto condo mar­ket in 2003.

One fac­tor could be the ser­vice nature of Toronto’s econ­omy. From Octo­ber 2008 to Novem­ber 2009, the ser­vice sec­tor of Ontario’s econ­omy lost only 0.4% of its jobs. Goods-producing jobs con­tracted by 10.5%.

Some job sec­tors – finance, insur­ance, real estate, leas­ing; pro­fes­sional, sci­en­tific and tech­ni­cal ser­vices – actu­ally saw net job growth dur­ing the reces­sion. Those jobs have a heavy pres­ence in Toronto.

Obvi­ously, peo­ple felt con­fi­dent enough in their prospects to pur­chase real estate.

In a Dec. 1 report, TD Eco­nom­ics said hous­ing usu­ally fol­lows a “first-in, first-out’ cycle dur­ing eco­nomic downturns.

Nation­ally, the robust recov­ery had econ­o­mist Pas­cal Gau­thier won­der­ing whether a bub­ble could develop and whether afford­abil­ity had sig­nif­i­cantly eroded – some­thing that could adversely affect future demand.

“The mis­align­ment of home prices with their fun­da­men­tal dri­vers, such as demo­graph­ics and income, can­not last. That much is known. What is less clear is the exact tim­ing of when and pre­cise chan­nel by which the two will even­tu­ally realign,” he wrote.

That being said, he didn’t see a high risk of a cor­rec­tion in the short term.

In Toronto, more sup­ply in the form of new house and condo com­ple­tions could help mod­er­ate price hikes, he said.

TD Eco­nom­ics also said by its cal­cu­la­tions, the pent-up demand that devel­oped dur­ing the uncer­tain early days of the reces­sion had exhausted itself by Novem­ber. Lyons agreed with those assessments.

Lyon said one thing that’s push­ing price growth is the lack of list­ings across all types of homes.

“I find that puz­zling, because a lot of peo­ple are sit­ting on a nice uplift,” he said. “Why wouldn’t they use that to either trade up or trade out of the market?”

When you drive up and down the streets, there are no signs. “My real estate agent friends are really uptight because they just can’t get the list­ings,” he said.

Every­one has a multiple-offer bid­ding story.

If there were more prop­er­ties on the mar­ket, prices wouldn’t be ris­ing as fast, he said, adding he’ll be inter­ested to see if there’s a big upsurge in list­ings come spring.

“We still have an afford­able prod­uct mix here but we always get ner­vous when prices start climb­ing, because we don’t want to lose Toronto’s afford­abil­ity,” Lyons said, not­ing Van­cou­ver is a city with real afford­abil­ity issues.

Unlike Van­cou­ver, Toronto has plenty of land avail­able for high-rise con­do­mini­ums – although there is a short­age for single-family homes, he said.

Younger peo­ple are flock­ing to the lower east­ern area of inner Toronto as they can live eas­ily with­out a car while access­ing their work­places down­town. Employ­ers are invest­ing in office devel­op­ment down­town to accom­mo­date this tal­ent pool, he said.

With new immi­grants con­tin­u­ing to flow into Toronto and hop­ing to get into the hous­ing mar­ket, and the investor sec­tor hold­ing in, real estate val­ues should hold up in 2010, Lyon said.

“Not an out­stand­ing year, but a good year on bal­ance, with an empha­sis on Toronto city proper and in the resales … any­thing in desir­able neigh­bour­hoods, around tran­sit, is going to keep doing very well,” he said.

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