In the Greater Toronto Area’s housing market, some buyers are finding unexpected opportunities as a growing number of sellers show increased willingness to negotiate prices. This trend, described by John Pasalis, broker and president of Realosophy Realty, stems from what he terms "seller fatigue" amid a prolonged period of declining property values in Ontario.

Home prices in the region have been trending downward for more than four years, creating a split in seller motivation. Pasalis notes that while some homes sell at prices above expectations, others go for significantly less. He explains that sellers who have owned their homes for a long time, sometimes 15 years or more, tend to exhibit greater flexibility due to their desire to move on, whereas those who purchased more recently and face potential losses are often less willing to compromise.

Contrary to common assumptions that sellers experiencing financial strain are the most motivated, Pasalis observes many homeowners with substantial equity are simply ready to close the chapter on their current property. “You’re less concerned about the extra $50,000 – especially if you’re already checked out and moved on mentally,” he said, highlighting that emotional readiness to sell can override price concerns.

Real estate agents representing sellers sometimes face pushback when advising clients to hold out for better offers. Pasalis recounted instances where sellers quickly accepted low offers out of concern that buyers might withdraw during counter-offers. While this caution is understandable, he emphasized that the final decision rests with the homeowner.

Sentimentality occasionally influences selling decisions as well. Pasalis recalled a case where a homeowner felt favorable toward a buyer purchasing the home who shared a similar demographic background, demonstrating the nuanced factors at play in sales beyond purely economic considerations.

Pasalis also underscored the increasing use of artificial intelligence tools by real estate agents to appraise home values. While these technologies, including AI models like Claude and real estate startups’ tools, can produce polished evaluations, he cautioned against overreliance on them. According to Pasalis, valuing homes remains part art and part science, as photographs and automated analyses often fail to reveal less obvious property issues.

Despite some sellers’ growing readiness to negotiate, many still anchor their expectations to prices seen during the market’s peak in early 2022, sometimes holding out for prices significantly above current market values. This dynamic contributes to a decline in new listings; for instance, new listings in the GTA fell nearly 13 percent year-over-year in June.

Economists like Alexandra Ducharme of the National Bank of Canada note recent improvements in sales in Ontario, attributing the uptick to better affordability drawing previously sidelined buyers back into the market. However, she cautioned that these sales levels remain low historically and should be regarded as a recovery from depressed conditions rather than evidence of strong market momentum.

Pasalis predicts the Toronto-area market will continue to face challenges for the foreseeable future. He referred to the June figure of just under four months of inventory for low-rise properties—a measure reflecting how long current listings would take to sell at the present sales pace—as an indicator that prices may stabilize only after additional supply is absorbed and that metric falls closer to three months.

Market participants are still largely in a phase where buyers seek to purchase below recent comparable sales, contributing to continued price pressures. Pasalis emphasized the need for a period of stability to build consumer confidence in the market, noting, “Everyone wants a slightly better price,” reflecting prevailing cautious sentiment among buyers.