Every year, sometimes twice a year, I write about the hypothetical market crash de jour. I mostly write blogs on topics that my clients ask me about.

However, this year, no one is asking me; rather, they tell me that the market is crashing. Often in a slightly panicked but mostly resigned sigh, as in “Ugh, the market is crashing. ”

Who can blame them for thinking this? I wake up to my google alerts with headlines such as “Canadian Real Estate expected to Drop 24%” !

No. The market is not crashing. There are many factors that are impacting housing prices, including inflation, interest rates, Russia’s war in Ukraine, and the provincial and federal governments talking about reigning in the housing market. These factors are arising because of the massive price growth that occurred during COVID in 2020 and 2021.

There’s no doubt that the market is no as tight as it was at the beginning of the year and that some houses are selling for slightly less than we expect them to. We can reasonably say that the market is showing signs of softening, however, there is still a huge imbalance between supply and demand and we are still in a seller’s market.

Hypothetically, even if the housing prices drop by 24% (Big and unlikely IF), they will still be higher than they were at the beginning of 2020. The buyers who bought during that time will only lose money if they need to sell immediately. If they can hold on to their property for just a few more years and ride out this uncertain time, they’ll still make money. Remember, real estate is not supposed to be a get-rich-quick scheme. A healthy market is one where most people making a reasonable salary can expect to one day soon buy a house. The Toronto market is unattainable for most buyers, so, therefore, a little bit of price correction is ultimately healthy for the longevity of the market.


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The only way that the real estate market will bottom out, is if a lot of homeowners need to sell their houses at the same time because they are in financial trouble. We know that the financials of most homeowners is solid and that the job market right now is also strong.

 Anyone who has bought a home in the past five years has been stress tested at a much higher interest rate than what they pay, in anticipation of an eventual interest rate increase. Therefore, we have no reason to believe that this mythical flood of listings will come about. In the absence of an imbalance of supply and demand, where we have more supply than demand, a market crash is purely hypothetical.

What to do if you’re a seller: Don’t panic. You will still make money on your home. Maybe not as much as you would have made it if you had listed it in January 2022, but more than if you had listed it in January 2021.

Try to sell your house before you buy your house so that you know exactly how much money you have to go shopping.

What to do if you’re a buyer: Be realistic about pricing! Despite the headlines, the market has not crashed, and you can’t expect to get a 20% discount on the house you love just because the market is soft. Buy a house that you plan on living in for the next five to ten years, and know that you’ve made a solid financial decision.

We have a strong market that needs some soft correcting. This is a good thing and it is not an indication of a crash.

As always, stay safe
Robyn VanderVennen