According to recnt numbers from the Toronto Regional Real Estate Board (TRREB), Toronto home prices continued to soften in July, but the bigger story may not be the decline in prices. It may be what sellers are choosing not to do.

After several months of declining prices, more homeowners appear to be stepping back from the market rather than accepting today’s lower values. At the same time, buyers continue to enjoy choice, negotiating power and relatively little pressure to act.

That creates an interesting—and potentially important—setup for the fall market.

Prices continue to move lower

According to TRREB, the average GTA home sold for $1,003,956 in July, down 4.5% from July 2025.

More immediately, the average was $54,972 lower than June, representing a 5.2% month-over-month decline.

Before concluding that Toronto home prices suddenly fell by 5%, however, it's worth putting the monthly numbers into context.

Average sale prices can be heavily influenced by the type of homes that sell in a particular month. July and August are traditionally quieter than the spring market, particularly for larger family homes. With fewer expensive properties changing hands, the overall average can fall even if individual properties haven't declined by quite as much.

The broader trend, however, is difficult to ignore. TRREB's benchmark home price was 4.6% below where it was a year ago.

In other words, July's average may exaggerate the pace of the decline, but it doesn't change the direction of the market.

Toronto real estate is still looking for a bottom.

Buyers have the advantage—but they're not exactly rushing in

There were 5,995 sales across the GTA in July, just 0.9% fewer than the same month last year.

That's an interesting statistic.

Sales haven't collapsed. Buyers are still buying. But they're taking their time, and sellers are having to work harder to get transactions completed.

The average property spent 32 days on the market, compared with 29 days in June. Homes sold for an average of 97% of their most recent asking price.

This isn't a market in free fall.

It's a market where buyers have leverage.

They have options. They can negotiate. And, perhaps most importantly, they don't feel compelled to buy the first house they see.

For buyers who are financially prepared, that can be a very good position to be in.

Detached homes take another hit

The weakness has been particularly noticeable in the detached market.

In the 905, the average detached home sold for $1,207,295 in July, compared with $1,272,842 in June—a decline of approximately $65,500, or 5.1% in one month.

Toronto detached homes experienced an even larger percentage decline, with the average price falling approximately 6.1% from June, or roughly $100,000.

There is an important caveat here: the 905 figures are based on a much larger sample of detached sales—2,098 compared with 691 in Toronto—making them potentially more representative of broader market conditions.

Seasonality also matters.

Families buying larger homes often try to complete their purchase in the spring, giving them time to move before the school year begins. By July and August, some of that demand has disappeared.

So we shouldn't assume that every detached home in Toronto suddenly lost $100,000 in value.

But we also shouldn't dismiss the numbers entirely.

The market is clearly softer than it was a year ago.

The housing market is a chain—and the chain is slowing

There's another issue that doesn't get nearly as much attention as the headline price numbers: move-up buyers.

Consider the chain reaction that normally takes place in a healthy housing market.

A first-time buyer purchases a condo or starter home. The seller uses that transaction to move into something larger. The seller of that larger property moves again. And so on.

One transaction helps create another.

But when first-time buyers are struggling with affordability, higher carrying costs and tighter financing conditions, that chain slows down.

And when it slows down at the bottom, the effects eventually work their way up the market.

Data from Teranet suggests first-time buyers now represent a larger share of the market than ever before. But that doesn't necessarily mean there are more first-time buyers than in the past. Overall transaction volumes remain near historically low levels.

A larger slice of a much smaller pie is still a smaller pie.

Here's where things get really interesting: sellers are disappearing

In my view, this is one of the most important developments in the July numbers.

New listings fell 17.8% year-over-year to 14,484.

Active listings fell 12.1% to 26,098.

But sales were down just 0.9%.

Think about what that means.

The supply of homes coming onto the market is shrinking much faster than the number of homes actually being sold.

Active listings have now been below last year's levels for three consecutive months.

That suggests something important is happening on the seller side.

Rather than continually lowering their expectations, some homeowners appear to be saying:

"If I can't get the price I want, I'll wait."

And that could become increasingly significant as we move into the fall.

Why aren't we seeing those homes?

TRREB's Market Watch doesn't track cancelled or suspended listings, so it doesn't tell the entire story.

Data from Habistat, available through PropTx, provides another piece of the puzzle. While cancellations are down from last year, they are still occurring at the second-fastest pace on record.

Put that together with the sharp decline in new and active listings, and a picture begins to emerge.

Some homeowners are:

• Taking their homes off the market rather than accepting a lower offer
• Cancelling listings that aren't generating sufficient interest
• Waiting for market conditions to improve
• Deciding not to list at all after seeing what comparable properties have actually sold for

This is very different from a market where everyone is rushing for the exits.

Instead, we're seeing a growing number of sellers simply opt out.

Does declining inventory mean prices are about to rise?

Not necessarily.

This is where it gets tricky.

Buyers haven't suddenly become more confident. Affordability hasn't dramatically improved. Mortgage payments remain a significant hurdle, and completed transactions are still establishing lower comparable values.

So while declining inventory is positive for sellers, it doesn't automatically translate into rising prices.

For that to happen, we'd need to see demand increase meaningfully at the same time that supply continues to shrink.

Right now, we don't have enough evidence to say that's happening.

What could happen this fall?

The fall market could be particularly interesting because the balance between buyers and sellers may become less obvious.

Sellers may look at declining inventory and conclude that there are fewer competing properties—and therefore decide to hold firm on price.

Buyers will look at the other side of the equation:

• Prices are lower than a year ago.
• Homes are taking longer to sell.
• Sellers are still negotiating.
• Affordability remains challenging.
• Recent sales are creating lower comparable values.

So who blinks first?

That's the question.

If active listings continue to decline, sellers may gradually regain some confidence. If buyer demand remains modest, however, sellers may discover that simply having fewer competitors doesn't necessarily mean buyers are willing to pay more.

The next few months should tell us a lot.

What does this mean if you're thinking about buying?

If you're a buyer, there is still no obvious reason to panic.

You have choices, and in many segments of the market you have negotiating power. A property that would have attracted multiple offers in a different market may now sit for several weeks and provide an opportunity to negotiate.

But there's an important distinction between being patient and waiting for the absolute bottom.

Nobody rings a bell when the market reaches its lowest point.

If you find the right property, can comfortably afford it and intend to own it for the long term, trying to save another 2% or 3% by perfectly timing the market may ultimately be less important than buying the right home at a price that makes sense.

And what if you're thinking about selling?

This is where today's market requires a more strategic approach.

The days of simply putting a house on the market, choosing an optimistic asking price and waiting for buyers to compete may be gone—at least for now.

Pricing matters. Presentation matters. Timing matters. And understanding your competition matters.

The most important comparable isn't necessarily what your neighbour is asking. It's what similar properties have actually sold for.

And if you're not prepared to accept today's market value, you may be better off understanding that before putting the property on the market.

Because the July numbers suggest that more sellers are making exactly that decision.

They're choosing to wait.

The Bottom Line

The Toronto real estate market isn't collapsing—but it isn't recovering yet either.

Prices are still trending lower. Buyers remain cautious. Sellers are becoming more reluctant to sell at today's prices. And inventory is beginning to tighten.

That combination makes the fall market particularly difficult to predict.

The big question isn't simply "Are prices going up or down?"

It's this:

Will buyers become more confident before sellers become more willing to accept today's prices?

The answer could determine where Toronto real estate goes next.

If you're considering buying or selling in the GTA, I'd be happy to discuss what these market trends mean for your particular property and neighbourhood. The headline numbers tell only part of the story—the most useful information is often found in the details of your specific market.