By Susan Pigg – Toronto Star MoneyVille

Finan­cial con­sul­tant Jose Jimenez has been on his own gut-wrenching roller coaster ride the last few weeks — and not because of the stock mar­ket fluc­tu­a­tions he mon­i­tors daily.

Jimenez, 35, has been try­ing to buy his first home.

“In a way, I’ve been root­ing for the mar­kets to tank a bit and hop­ing that might encour­age other peo­ple not to buy right now, but that doesn’t seem to be the case,” says Jimenez, whose wife is expect­ing their sec­ond child.

In fact, whip­saw­ing mar­kets, fears of a double-dip reces­sion and global eco­nomic uncer­tainty seem to have made hous­ing look as good as gold.

Cana­dian home sales were up 12.3% last month from July, 2010 and are expected to grow slightly the rest of this year because of low inter­est rates, the Cana­dian Real Estate Asso­ci­a­tion said Tuesday.

“We antic­i­pate that, going for­ward, the hous­ing mar­ket in Canada is going to be an oasis of sta­bil­ity com­pared to what is expected to be fur­ther volatil­ity in finan­cial mar­kets,” Gre­gory Klump, CREA’s chief econ­o­mist, said in a tele­phone interview.

Almost 285,000 hous­ing units have sold across Canada so far this year, just 1.6% below sales for the same period last year, and that’s expected to hit 450,800 by the end of 2011, accord­ing to CREA forecasts.

That’s despite dire pre­dic­tions ear­lier this year from some hous­ing ana­lysts that the real estate bub­ble is over­due to burst and send Toronto prices top­pling by as much as 25%.

Jimenez is keenly aware of all those num­bers but has a few more press­ing ones on his mind: His sec­ond child is due in Sep­tem­ber, his 2-year-old daugh­ter Sadie will start school in a cou­ple of years and Jimenez and his wife, Syd­ney Richard­son, just want a house they can make a home.

Richard­son is now wor­ried the cou­ple are “doomed” to have to raise their chil­dren in their two-bedroom Beach apart­ment after los­ing out Mon­day in a six-person bid­ding war — their sec­ond in just a few weeks — on a ren­o­vated three-bedroom Beach semi that was listed for $699,000.

The cou­ple offered $703,000, only to be out­done by a so-called “bully bid” — a down-to-the-wire offer almost $100,000 over ask­ing price.

Com­ment: Wrong. A bully offer is one that comes in before the offer date. An offer that comes in at the last minute is just rude – but effec­tive in that the other bid­ders are not expect­ing it. Nei­ther prac­tice is con­sid­ered to be good behaviour.

Last month they were braced to offer $70,000 over the $550,000 ask­ing price for a Rhyl Ave. house but found them­selves up against 13 other poten­tial buy­ers. The house sold for $120,000 over asking.

The cou­ple has talked about putting things on hold until the real estate mar­ket calms down, but their biggest fear is that day will never come.

Com­ment: Not any time soon. And even if it does, the house that was $699,000 today will be $819,000 by the time the bid­ding wars end. Does not mat­ter either way if you can­not afford it.

While Sonya Gulati, an econ­o­mist at TD Eco­nom­ics, antic­i­pates sales will be a lit­tle more sub­dued in the fall, she said first-time buy­ers and immi­grants are still being drawn into the mar­ket by inter­est rates that are expected to remain low until 2013.

“On the one hand, they are incred­i­bly brave given all the eco­nomic uncer­tainty out there,” says Gulati, “but you need a place to live and a house is a long-term pur­chase so peo­ple seem to think it makes sense despite the mar­ket gyrations.”

Real estate agents say they are see­ing more and more home buy­ers, bank­ing on low inter­est rates, tak­ing on mort­gages of $300,000 to $500,000.

A vet­eran Beaches real estate agent blames lack of sup­ply for many of the bid­ding wars, but expects that could ease in the fall as more baby boomers look to cash out on their biggest asset at peak market.

Com­ment: But baby boomers are not cash­ing out, they are stay­ing in place and ren­o­vat­ing. That is part of the prob­lem, why list­ings are down and bid­ding wars are so common.

Domenic Pol­soni is so con­fi­dent real estate is a sure bet, he recently traded in his Mil­ton home, and gave up one car to help finance the move to a more expen­sive house in the Duf­ferin St. and Shep­pard Ave. area.

“Peo­ple have been say­ing for years that the real estate bub­ble is going to burst, but I can’t imag­ine that will hap­pen. We sur­vived a major hit in 2008, peo­ple held their breath and then every­thing just seemed to march along.”

Jimenez fears get­ting caught up in the cur­rent real estate “panic.”

“But this is the neigh­bour­hood where we want to raise our kids. Even if we were to take a short-term loss, I wouldn’t be too wor­ried about it in the long run.

“I think we’d def­i­nitely get the value back from it, not just in the sale price, but in the life we will have had bring­ing up our fam­ily in that neighbourhood.”

———————————————————————————————————————
Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
———————————————————————————————————————

jose jimenez syd­ney richardson

Related posts:

1. Hous­ing mar­ket hot, but will it last? Exist­ing home sales in the Toronto area soared 64% in…
2. Cana­dian hous­ing mar­ket rebounds The Toronto real estate mar­ket sur­prised econ­o­mists with a better-than-expected…
3. Hot hous­ing mar­ket a good sign Canada Mort­gage and Hous­ing Corp. said Thurs­day it expects markedly…
4. A buy­ers’ mar­ket? Not in my expe­ri­ence The hot pock­ets are hot again. And with all the…
5. Toronto’s hous­ing mar­ket bounc­ing back Toronto prices are back on track to his­tor­i­cally expected rises…