How Much Lower Can Prices Go Amid Slowing Sales?

How Much Lower Can Prices Go Amid Slowing Sales?

As we enter the second half of 2025, the Richmond Hill real estate market continues to show clear signs of stress, particularly in the form of slowing sales activity across all property types. Despite the drop in transaction volume, home prices have only declined moderately so far. However, the underlying pressure is mounting, both from local market dynamics and from broader economic uncertainties that could drive prices down further.

One defining characteristic of the current Richmond Hill market is the lack of urgency among buyers. Most active buyers are highly selective, they know what they want, and unless a property meets their criteria exactly, they are willing to wait. As a result, only two types of homes are selling: properties that are meticulously prepared and offer features that match buyer demands, and homes where the seller is open to accepting offers 5% to 10% or more below market value, even if the property is in average condition. This buyer behavior is occurring across all housing types but is most pronounced in price-sensitive segments.

Richmond Hill’s detached housing segment currently sits at 6.7 months of inventory (MOI), with only about 30% of new listings sold last month. New listings have slightly decreased month-over-month but remain historically high. Attached homes, including semi-detached and townhouses, now face 7.6 MOI, with just 21% of listings sold in the past 30 days. Inventory in this segment has continued to climb and is now at a multi-year high. The most sluggish category is condo apartments and condo townhouses, which hover around 10 MOI, with only 19% of listings sold last month. While new listings in this category dipped slightly, they remain historically elevated.

Across the board, the market is saturated with listings, but buyer demand has not kept pace. This imbalance is setting the stage for further price adjustments, especially if inventory continues to climb into September.

In today’s Richmond Hill market, it’s not external shocks that are shaping the price curve, it’s buyer sentiment. Buyers are cautious, discerning, and laser-focused on securing homes that match their specific needs. Few are in a rush, and most would rather wait than settle.

Recently, I worked with a buyer searching for a detached home in Richmond Hill. We visited several properties, and one stood out thanks to its well-designed layout and walk-out basement. However, the seller had priced it at the median market level and still organize a bidding presentation. Despite the buyer's interest, they chose to wait rather than compete. The home eventually sold above asking, but the buyer had no regrets. Several nearby properties with comparable size and finishes were recently sold at discounted prices, which reinforced their decision. While the walk-out basement and large windows were desirable, they didn’t justify paying a premium for most buyers in this market. In another case, a buyer was looking for a detached bungalow with a 9-foot ceiling on the main floor. A unit became available at a reasonable price, but it only had an 8-foot ceiling, and the buyer passed. They preferred to wait until the right home comes up, confident that the market will eventually deliver.

These examples highlight a clear pattern. Only homes with rare, sought-after features or exceptional preparation are attracting strong offers. The rest will sit unless the seller is flexible, especially when it comes to price. Buyer demand hasn’t disappeared, but it is condition-sensitive and highly value-driven. This ongoing standoff between sellers and buyers continues to put downward pressure on prices, especially with the fall market approaching.

With July and August typically slower due to summer holidays, September may become a pivotal moment for Richmond Hill. If new listings spike but buyer sentiment remains flat, prices could face more noticeable downward adjustments. High-end properties have held up better so far, but historically, price corrections often begin in entry-level or mid-market segments and work their way up. If economic conditions worsen, whether through trade friction, slow growth, or sticky interest rates, even luxury homes may feel the impact.

Richmond Hill’s housing market is currently walking a tightrope. Sellers are holding firm on pricing, but buyers aren’t following. Unless trade uncertainty subsides, interest rates ease, or consumer confidence rebounds, the imbalance in supply and demand could push prices lower, perhaps faster than we've seen to date.

For now, the best chance of selling lies in proper preparation and realistic pricing. Homes that shine or are priced attractively will still draw attention. But for the broader market, the real question isn’t whether prices will fall, it’s how much and how soon.

 

Over the past year, I’ve had more and more conversations with Markham homeowners trying to sell their 3-storey townhouses, and a common question keeps coming up: why are these homes taking longer to sell than 2-storey townhouses, even when they’re newer or larger in size?

On paper, a 3-storey townhouse often seems like a better deal. You might get more total square footage, a newer build, or even a bonus room on the ground level that can serve as an office or gym. But in reality, buyers aren’t just looking at square footage, they’re thinking about how the space feels and functions day to day. And that’s where the 2-storey layout usually wins.

In a typical 3-storey townhouse, you have the garage and a small room on the first floor, your kitchen and living space on the second, and bedrooms on the third. While it sounds spacious, that vertical layout means each floor is smaller and more segmented, which can feel awkward. Running up and down multiple flights of stairs just to grab a snack, do laundry, or settle kids into bed can get old fast, especially for families with seniors who may have knee issues.

By contrast, 2-storey townhouses tend to feel more practical. The kitchen, dining, and living spaces are all together on the main floor, making everyday living easier and more connected. Bedrooms are just one level up. Even with a bit less square footage, the overall flow of the home often feels more natural. And for many buyers, that comfort matters more than numbers on a listing.

Another factor that complicates some 3-storey townhouses is the presence of POTL (Parcel of Tied Land) fees. While not all 3-storey townhouses have them, many newer developments do. These fees usually cover shared elements like laneways, snow removal, and landscaping. They're not outrageous, but they are an additional monthly cost, and in today’s market, buyers are doing the math. Add in higher property taxes and sometimes the requirement for a status certificate, and buyers start to wonder: is this really a freehold, or is it more like a condo?

For a while, 3-storey townhouses with POTL fees were popular with investors. They were slightly cheaper than traditional freeholds and could fetch similar rent. But now, investors are far more cautious. Every monthly fee is scrutinized. Unlike traditional 2-storey freeholds, where most outdoor maintenance can be left to the tenant, owners of POTL homes are still on the hook for those shared costs. As a result, the return on investment isn’t as attractive, and that portion of the market has gone quieter.

That doesn’t mean 3-storey townhouses are bad homes, they absolutely have their place, especially for buyers who prioritize modern finishes, a bit more space, or separate work-from-home areas. But in today’s market, with more listings and more cautious buyers, layout and monthly costs play a much bigger role than they used to. Sellers of 3-storey homes, especially those with POTL, need to be mindful of how their property is presented, priced, and explained.

If you’re thinking about selling, it’s worth stepping back and seeing your home through the eyes of today’s buyer. In a market like Markham, where choices are plenty and buyers are deliberate, a thoughtful strategy can make all the difference, whether your home has two storeys, three, or something in between.



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