What goes up doesn’t always come down
(Source: The Toronto Star)
What happens if you had a recession and housing prices didn’t really go down?
That’s the scenario Toronto could be in by the end of 2009, as economists scramble to revise forecasts.
Toronto housing economist Will Dunning is forecasting that the average price of an existing home in the Greater Toronto Area will be $378,700 by the end of this year. His previous forecast was for prices to decline to $358,100, or about 5.6 per cent from 2008. That’s in line with the estimates of about a 5 per cent decline from most major housing analysts.
“The forecast has been raised substantially,” Dunning says. “For the past three months, resale activity has been much stronger than I had been anticipating.”
A $378,700 price is spitting distance of the $379,347 average price recorded at the end of 2008. Dunning says this year’s average price could surpass last year’s.
Under that scenario, prices would have increased every year since 1996 – a total of 13 straight years.
Read Tony Wong’s full article “What goes up doesn’t always come down” in the Toronto Star (August 26, 2009).