At first, it seemed a whisper on the wind, a faint rumour, a nearly-imperceptible shift: the last two weeks of February in the Toronto housing market seemed, well, slower.

Agents, who had spent months, if not the past two years, coaching clients through some of the toughest GTA market conditions ever seen, suddenly realized there were fewer participants at offer night. Bully offers made a comeback. And buyers -- many of whom had been searching endlessly only to experience rejection after rejection -- were getting in.

Chatter began to circulate on real estate Twitter among listing agents who were receiving far fewer showings for their properties -- a marked turnabout from January, which kicked off the year with the second-highest ever sales volume for the month, despite historically low inventory.

With the official February numbers just days away from being reported, such events beg the question: could this be an early sign of a market downturn? Could the selling cycle be normalizing from pandemic-induced insanity? Have prospective buyers, fatigued from contending with the steepest sellers’ market conditions since 2020, finally had enough?

Read: Where Have All the Sellers Gone?

According to Nasma Ali, Broker and Founder at One Group Real Estate, what’s occurring is something policy makers, real estate analysts, and buyers have all hoped for -- more supply is finally hitting the market. She says a flood of listings have come online since January, in both the single-family and condo segment, effectively absorbing some of the pent-up buyer demand and taking considerable steam out of multiple offer situations.

“I listed a house two weeks ago, and in two days, we only had six bookings; that is very slow,” Ali tells STOREYS. “And this was in the Upper Beach! The listing was beautiful, and priced at $1.1M -- so not a very high price point.” 

She says she’s seen the same pattern play out with listings in the typically sizzling Brampton and North York markets, where highly-coveted homes were previously getting upwards of 50 showing requests, and often just as many offers.

“It’s one of those things where in January, in a certain area and price point, we’d see maybe three or four listings a week that would pop up. It was very slim pickings. And we’d have clients who weren’t even going out to see places, because there was nothing that was fitting their criteria and budget,” she says.

She adds that there’s been a lot of re-listings as of late, something the official supply numbers don’t reflect. “That’s the tough thing about TRREB [data], that we can’t capture -- they can tell you how many listings at a given time, but not how many of them were terminated and relisted. So you may see 30 new listings in a given area, but maybe five or 10 were relisted.”

Another main catalyst, she says, are investors, nervous they’ve missed the market’s price peak. With interest rates poised to increase as early as today, and due to the impact COVID has had on rental profits, many are seizing the opportunity to realize their robust price gains, bringing fresh supply to market in the process.

Finally Hitting the Price Ceiling

Another factor is just how expensive purchasing a home has become, finally hitting thresholds the market may not be as readily able to absorb. David Fleming, Real Estate Broker at Bosely -- Toronto Realty Group, says when prices have experienced such dramatic increases -- up 28.6% annually in January in the GTA, to an average of $1,242,793 -- demand will naturally start to leave the market as more buyers hit price ceilings.

“I don’t want to say a 2017-like shift in the market, but when you see a run-up in prices from January 1st to February 1st of 10%, eventually the market will become more balanced,” he says. “Some people have said the market is shifting or cooling. Let’s say you have 25 offers on a condo and now you only have six... let’s not get ahead of ourselves.

“Again, if a house in Leaside listed for $2.9M sells for $3.8M, where’s the shift? I think what’s happening is in mid-January is you could have listed anything anywhere in any condition at any price and have any number of offers. Now, that may not be the case for every single property -- but it is still for the overwhelming majority of them.”

The Right Opportunity

However you look at it, the upside of the current “blip” is that it offers buyers -- those who’ve stayed in the game, anyway -- likely their best chance in months to actually land a home that suits their needs.

Anita Springate-Renaud, License Partner at  Engel & Völkers Toronto Central, says the current climate can certainly present the right buyer, who has the right timing, with an opportunity. She notes that while she’s still seeing 60-plus showings in highly coveted neighbourhoods, the office phones have certainly been quieter. 

“I think some are getting in during that little bit of a lull. I’ve had clients where they’ve been looking out in Mississauga for a year, and we’ve put in 10 or 11 offers in, and they finally got one, and there weren’t as many offers on that particular property,” she says.

She adds that it can be especially beneficial right now for buyers willing to look past aesthetics.

“It’s generally the homes that need a little bit more imagination to imagine yourself in them,” she says. "I’m always telling clients, ‘Don’t pay for someone else’s decor; it’s lipstick on a pig. Look at something that has great bones, and you’ll find that those homes tend not to get as many offers, which is fine, because then, you’re not paying as much, and then with the money you save, you can then create your own home to your own tastes.”

READ: Prices Continue to Climb in the GTA Rental Market

What has absolutely shifted in her view, is that sellers are having to be much more strategic with their listing approach, as wildly-priced homes are pulling in fewer eyeballs than they previously did.

“I think if you have something listed where you’re clearly overpriced, even when there’s little available, you will not get the amount of traction,” she says. “You really need to price it where it needs to be, or you do yourself a disservice.”

However, it should be noted that price growth, and homes routinely selling for hundreds of thousands over asking, have yet to see any kind of relief. That’s because, Ali says, most buyers have yet to catch on to the fact that the market is shifted.

“Right now we’re in a weird transition, because the buyers don’t know showings are low yet; they think it’s still super hot, and that’s why we’re still seeing the prices [rise]. They don’t see our [agent] cards, they don’t know we don’t have those hundred showings -- but we know,” she says.

“That takes time, for them to start realizing it. In a few weeks, when they start to see more listings are relisting, that’s when they start to realize, ‘Oh, wait a minute, we think there’s a change.’ But right now, they’re still caught up in the frenzy.”

A Game of Broken Telephone

At the end of the day, until the February data comes out, we won’t know just how much softer the month has been. And, when asked if this is likely to be an enduring trend, Springate-Renaud isn't overly optimistic, pointing to the aggressive immigration targets the Canadian government has set for the year, which will usher back additional buyer competition that was largely absent during the pandemic.

"Now we have clients sitting on the fence saying, 'I’ll just wait a little bit longer', and I’m like, ‘That’s maybe not such a good idea,’" she says. "Not only are rates going up, but there’s going to be this influx of people, and naturally they all want to come to Toronto, or at least the GTA. No one’s moving to Penetanguishene.”

And, when it comes down to it, chatter of a slower market may just be that: chatter.

“Agents talk, and we get a lot of banter in the office, or agents from other brokerages saying, ‘Have you felt things shift?,'" says Fleming. "It’s a bit of a game of broken telephone, one person says it, and another person picks it up, so from my perspective, I have yet to see it; if you look at a condo with 35 offers on it that you’re trying to bid on and you say, ‘What shift? What are you talking about?’”