People relocating amid pandemic driving local house prices

Housing prices in Waterloo Region continue to surge as people move from larger cities due to the COVID-19 pandemic.

First-time home buyers said they're worried about being priced out of a hot seller's market.

Justin Decosemo has been renting his home in Cambridge for three years, but said he wishes he owned it.

"We told our real estate agent we're disheartened by the whole process," he said.

The father of three said he and his wife were optimistic at first. But, after three months of searching, he said their budget of $650,000 doesn't seem realistic.

He said he put in an offer for a house down the street from where he lives now six weeks ago. The asking price was $556,000 and it sold for $710,000.

This month, a semi-detached home in Kitchener's Laurentian Hills neighbourhood generated 53 bids and sold for $300,000 over the asking price.

"It isn't good buyers really go over their budget and their affordability constraint," said Dawn Parker, a real estate expert at the University of Waterloo.

Parker said it's possible buyers are overpaying, adding the high prices are likely the by-product of the pandemic.

"Panic bidding that goes into it creates higher prices than we would have if that aspect of the market calmed down," she said.

Parker said calming the market all depends on factors like people working from home and relocating from the GTA.

Decosemo said he's worried he'll need to leave his hometown.

"If in two years we still want to buy a house, we might not have a choice," he said.

Parker said people considering house shopping shouldn't move just yet.

The average price for a detached home in Kitchener last year was more than $850,000, a 25 per cent increase over a year ago.