As one might expect, the Pickering housing market has been impacted by recent economic turmoil. However, the degree to which it was impacted – and where it stands today – might surprise you. In this post, we’ll take a look at Pickering house prices and other key metrics to give you a solid overview of the current situation.
Pickering Housing Market Overview 2020
Pickering is a vibrant city with lots going for it. Interestingly, house prices here have seen a tremendous recovery since their COVID-19 slump, according to data from Zolo. Between May and June, property valuations rose 9.5% to an average of $761,000. That rise has placed the real estate market in the green for Q3, with growth now sitting at 3.2%.
Comparatively, house prices were down 1% between April and May, representing a 7.9% decline for the quarter.
Pickering’s recovery has been sharper than that of many other cities in the Greater Toronto Area. It’s hard to pinpoint the exact cause for this but the general trend of residents fleeing crowded cities for less densely populated regions may be at play here.
Similarly, many companies have adapted to the current situation, allowing some employees to work from home for the foreseeable future. Those in industries where “work from home” is swiftly becoming the mantra may see no reason to live in expensive cities like Toronto proper.
Pickering House Prices
Currently, a three-bedroom detached house in Pickering will cost you an average of $741,000. A three-bedroom townhouse will run you $631,000 on average while a two-bedroom condominium sells for an average of $490,000.
Condominiums remain the least popular type of dwelling in Pickering. In fact, their valuations remain quite deflated, down 9% overall according to Zolo’s statistics.
It’s not hard to see why people shy away from condos when you look at the beautiful homes in Pickering. For relatively little money, you can get a spacious backyard and a stunning new home. Besides, Pickering is a beautiful city. Some people would rather experience that beauty from their own backyard or deck rather than from a box in the sky.
The number of properties for sale in Pickering has taken a slump, falling from the previous highs of about 315 a year ago to 186. Listings are spending quite a bit more time on the market as well – an average of 37 days, compared to just 17 this time last year. Still in demand are new-build communities, which offer families a fresh start in a planned community. Read more here about why new build communities are so popular in the GTA.
There are many potential explanations for homes spending much longer on the market these days. For one, buyers throughout the GTA have been (understandably) spooked by economic uncertainty. The COVID-19 pandemic has thrown many businesses for a loop, prompting layoffs, reductions in hours, and a general sense of dread. Many people not already in the process of purchasing a home have pumped the brakes on their ambitions for now. But is this a wise decision, given the still-low home prices throughout the GTA in spite of a swift-growing economic recovery?
Is Now The Right Time To Enter The Pickering Real Estate Market?
While the Pickering real estate market has seen a swifter recovery than many other parts of the GTA, buyers may still be hesitant. However, the fact remains that Ontario’s economy is reopening swiftly. This has prompted optimism that is likely at least part of the explanation for house prices having recovered so quickly in some parts.
Even during the darker times of this pandemic, real estate market analysts did not endorse the idea of a market-wide collapse in Canada. RE/MAX, for example, described the downturn as more of an expected correction in red-hot house valuations. While it may be hard to remember, property valuations pre-pandemic were often described as an unsustainable bubble. Experts had been warning of a slump for months, if not years, prior to COVID-19’s emergence.
Now, combine this dose of reality with Canada’s already-strict mortgage regulations. Anyone looking to buy a house here goes through rigorous stress testing to ensure their eligibility. This in itself was designed to reduce lending to unqualified buyers. Major Canadian banks (including Scotiabank, which we partner with at Paradise Developments) are mandated to use these stress tests. Other lenders see them as a valuable risk reduction tool. This means that stress testing is pretty much unavoidable if you’re looking to purchase a home in Canada.
Pre-pandemic, many prospective buyers viewed this as a roadblock. Buyers’ understanding of the risks associated with taking an oversized mortgage had dissipated in the decade since the 2008 financial crisis. Current events, however, serve as a reminder that stress testing protects both lenders and borrowers.
Remember, house prices aren’t just arbitrary. They’re a reflection of what’s happening in the market. Stress testing gives buyers a much more accurate picture of what they can afford, which should be reassuring in these uncertain times. Be sure to check out our market overviews for these cities as well:
Pickering Real Estate Market: Conclusion
While Pickering’s real estate market took a hit in early 2020, its recovery has been much sharper than that of many other cities in the GTA. The average house price here is $761,000 as of June 2020. That’s up 8% from the previous month – growth that is enough to push the overall market back into the green for Q3.
There are several factors fueling this recovery. For one, Canada’s economy continues to reopen, prompting optimism and reassurance for those left uncertain about their jobs. Pickering is also much less densely-populated than other parts of the GTA, which fits with the overall trend of people leaving crowded areas.
Despite all this, there still remains some uncertainty about buying a home in the current climate. To be clear, buying a home is a very personal decision. Its feasibility depends on your job outlook and current financial situation. Strict mortgage regulations (including stress testing) should serve as reassurance for those worried that their financial situation may make homeownership in Pickering impractical.