From Frenzy to Fatigue: How the Market Shifted
It wasn’t long ago that Toronto’s residential real estate market operated in a state of near frenzy. From 2020 to 2022, fuelled by historically low interest rates, stimulus-driven liquidity, and a global pandemic that reset our relationship with space, real estate activity surged. Bidding wars were the norm, properties sold in days (sometimes hours), and fear of missing out dictacted almost every move.
Fast forward to today, and the mood has shifted entirely.
The urgency has all but evaporated, replaced by something more complex – hesitation, fatigue, and a growing sense of uncertainty. Buyers are pulling back. Sellers are adjusting expectations. And real estate professionals are navigating a dramatically different landscape.
We’re calling it what it is: the death of FOMO and the rise of real estate fatigue.
Buyers Are Watching, Not Jumping
Today’s buyer pool looks – and behaves – very differently. Many are sitting on the sidelines, watching listings pile up, and waiting for a sign of certainty before making a move. Gone are the days of blind bids and waived conditions. Instead, buyers are overanalyzing, overnegotiating, and often overwhelmed by choice.
Interestingly, the group most affected appears to be first-time buyers. High interest rates, media-driven fear, and concern over future value are giving many pause. The idea of making a mistake on your first purchase is terrifying, especially when the stakes are this high. It’s no surprise that analysis paralysis is dominating the conversation.
At the same time, there is a subset of buyers still very much in the game – those experiencing life transitions like marriages, relocations, or growing families. This group often has clearer motivations and timelines, allowing them to act more decisively, even in an uncertain market.
The Market Is Segmented, Not Stagnant
One of the most fascinating elements of the current market is how segmented it’s become. Some properties continue to attract multiple offers. Others sit, seemingly invisible, despite aggressive pricing and high-quality presentation.
We’ve seen packed open houses at $1.5M-$2M low-rise homes, primarily attended by young couples focused on lifestyle goals and family planning. These buyers aren’t panicking about market timing – they’re looking for long-term value in neighbourhoods that align with their lives. Conversely, the condo segment remains fragile, weighed down by oversupply, price softness, and first-time buyer hesitation.
It’s a tale of two markets. And for real estate professionals, this means advising with precision and reading the room with expert nuance.
Sellers Are Feeling the Shift Too
Until recently, listing a well-styled, turnkey property often meant a smooth and successful sale. But over the past few weeks, that playbook has started to unravel. Even listings that check all the boxes – location, finish, pricing – are seeing slowing traction.
Whether this softening is a seasonal blip or a deeper market signal remains to be seen. But what’s clear is that sellers need to approach today’s market with a combination of realism and adaptability. Pricing, strategy, presentation, and timing matter more than ever. And even then, there are no guarantees.
In fact, some of the strongest performing listings lately have been the least expected. It’s no longer just about quality – it’s about buyer psychology, media influence, and sometimes, just pure timing.
Is Confidence in Toronto Starting to Wane?
Beyond interest rates and inflation, there’s another undercurrent shaping market behaviour: confidence in Toronto as a city.
For the first time in years, we’re seeing potential buyers second-guess whether this is the city in which they want to build their future. Concerns around affordability, infrastructure, urban safety, and a perceived lack of long-term vision for the city are prompting people to pause – or, in some cases, leave.
And it’s not just talking. We’re seeing a real, measurable uptick in sellers offloading assets in preparation to relocate abroad. From Europe to the U.S. and smaller Canadian towns, Many are seeking out new opportunities, fresh starts, or simply more affordable lifestyles. For some, it’s driven by quality of life. For others, it’s political. But either way, it’s a trend that’s gaining traction – and it could have longer-term implications for the city’s real estate market.
Long-Term Thinking Wins the Day
Despite all of this, opportunity exists.
Buyers who can step back from the headlines, think long-term, and act decisively have a significant advantage. There’s less competition. More room to negotiate. And the rare chance to secure a foothold in Toronto without being caught in a bidding war.
While the market lacks momentum, it also lacks mania. And in that calm, strategic minds can thrive.
But real estate is no longer plug-and-play. It’s personalized. Nuanced. And driven by a complex web of economic political, and emotional forces. Which is why the value of experienced, strategic representation has never been higher. Today, great real estate agents aren’t just deal-makers – they’re advisors, analysts, and often, emotional support systems.
The Agent Landscape Is Evolving
This market has been a wake-up call for our industry. The agents who were able to coast through 2021 on high volume and little value-add are struggling. The bar has been raised, and clients are noticing.
Sellers and buyers alike are becoming more discerning in who they choose to represent them. Referrals alone aren’t enough. Today’s clients are interviewing, scrutinizing, and hiring based on skill, experience, and professionalism. And quiet frankly, it’s about time.
For those of us who live and breathe this business, the current climate is both a challenge and an opportunity. It’s hard. It’s demanding. But it’s also deeply rewarding. Because when the stakes are this high and the outcomes this uncertain, our work truly matters.
