Waiting for Yesterday's Price, or Moving Forward with Your Housing Plan Today?

Waiting for Yesterday's Price, or Moving Forward with Your Housing Plan Today?

About three years ago, I met a senior homeowner who was ready to sell his house and planned to use the proceeds to fund his retirement. After our first consultation, the price I recommended came in well below what he had in mind, and he could not accept it. In the end, he chose another agent who was willing to list the home at a higher price. Over the following three years, the house came on and off the market several times without selling, while he watched comparable homes on his street sell for significantly less than the number he had once turned down. His retirement plans have now been put on hold, and he has come to realize that time is the one thing none of us can get back.

I share this story not to say I was right, but because it captures the dilemma so many homeowners are facing today. Holding out for yesterday's price can feel like protecting your wealth, but the market does not negotiate with our expectations, and time is rarely neutral.

For most of the past two decades, owning property in Toronto felt like a one-way bet. Prices went up, equity increased, and if you were patient enough, waiting was usually rewarded. Over the last few years, that assumption has been tested. More and more homeowners are now asking me a question they never thought they would need to ask: what happens if prices do not return to the previous high any time soon? Should I sell now, keep waiting, move up, downsize, or buy another property?

I hear different versions of this question almost every week. One person owns a rental condo that requires a monthly top-up. Another family has outgrown its home but cannot bring themselves to sell below the price they could have received a few years ago. A retired couple wants to downsize and release some capital. Another family is perfectly comfortable in their current home, but after reading negative real estate news every day, they are starting to wonder whether they should do something.

They are all looking at the same Toronto market, but the right decision can be completely different for each person. That is why I think the most useful question today is not simply, "When will the market recover"? A better question is, "Does this particular property still fit my life, my cash flow and my plans for the next several years"?

One of the most common traps I see is that homeowners treat the previous market peak as a price the market is somehow required to return to. People often tell me, "I'm not in a rush. I can wait". My next question is always, "How long can you really wait"? One year? Three years? Five years? Ten years?

Toronto's own history tells us that real estate cycles can last much longer than people expect. After the late-1980s market peak, Toronto's annual average home price took roughly thirteen years to return to a similar nominal level. That does not mean today's market will follow the same pattern, and it certainly does not mean every neighbourhood or every type of property will need that long to recover. But the lesson is important: real estate may appreciate over the long term, but it does not have to appreciate according to your timetable.

The market can take its time. Your mortgage payment cannot. Property taxes, condo fees, insurance, maintenance, repairs and household expenses do not pause while we wait for the market to improve. So saying, "I believe Toronto real estate will eventually recover", is very different from saying, "Therefore I should continue holding this particular property today".

That difference is especially important now because there really is no single Toronto real estate market. Different property types and different neighbourhoods are behaving very differently. A move-in-ready family home in a strong neighbourhood may hold up much better than a dated property that needs major renovations. A unique low-rise home may behave very differently from a generic condo unit where buyers have many similar alternatives. New construction can also move differently from resale because developers may release inventory gradually, while individual resale sellers can adjust prices more quickly according to current buyer demand.

So instead of assuming that "the market” will recover all at once, I think homeowners should look much more closely at the specific property they own. What type of property is it? Where is it located? Who is the likely buyer? How much competition is there? How easy would it be to sell today? Those questions matter more than a broad GTA headline.

Because nobody can reliably tell us where prices will be three years from now, I prefer to use a stress test rather than a forecast. Let us assume a less favourable scenario. Suppose prices stay weak for another few years and then gradually recover. By the end of your holding period, maybe the property is worth more than it is today. At first glance, that sounds like a good result.

But what happened during those years? You still paid mortgage interest, property taxes, insurance, maintenance, condo fees if applicable, repairs, vacancy costs, tenant turnover costs and possibly negative cash flow. There is also another cost that many homeowners forget to calculate, and that is opportunity cost.

If you sold the property today, what could you do with the equity? Could you pay down another mortgage? Could you invest the money somewhere else? Could you use it for retirement? Could it help you move into a home that better suits your family? Even a moderate return on that capital can change the comparison quite a bit.

That is why I built a Sell or Rent Calculator for GTA homeowners. The purpose is not to predict exactly what your home will be worth five or eight years from now. It is to compare selling today with continuing to hold, using the same assumptions, and to see what future selling price would actually be required for holding to come out ahead.

When people ask me whether they should keep a property or sell it, I usually come back to three questions. The first is whether it is worth waiting. This is the mathematical part. How much more money will you need to put into the property? What price will the property need to reach in the future to justify holding it? What could your equity earn somewhere else?

The second question is whether you can afford to wait. This is often more important. If an investment property requires a $1,500 monthly top-up, then three years means $54,000 and five years means $90,000, before we even include major repairs, vacancy or tenant problems. A homeowner may genuinely believe the market will recover in five years, but if the family cash flow can only support another two years, then waiting five years is not really a plan.

The third question is whether you are willing to wait. This is where real estate becomes more than mathematics. A principal residence is not simply an investment account. It is where your family lives. It affects your children's schools, your commute, your neighbourhood, your routines and your quality of life. Sometimes selling may look better on paper, but if selling creates a much worse living situation for your family, continuing to hold may still be the right decision.

This is why I always look at principal residences and investment properties differently. An investment property should be judged primarily by its financial performance. A principal residence has to be judged partly by the life it provides.

For someone who genuinely needs a home, for example, I do not think the most important question is whether you can buy at the exact bottom. If your income is stable, your down payment is ready, the mortgage and monthly costs are comfortable, and you can accept that the property value may fluctuate over the next few years, then it can still make sense to buy.

A principal residence gives you value every day. Maybe it shortens your commute. Maybe your children finally have enough space. Maybe you are moving into a better school district. Maybe your parents can live with you. Maybe the neighbourhood simply suits your life better. Those benefits do not disappear just because the market drops another few percent. So for an end-user buyer, the better question is, "Does this home fit my needs, and can I comfortably afford it"? If the answer is yes, I would not let the fear of missing the absolute bottom stop an important life decision.

For families looking to move up, I think one of the biggest mistakes is focusing only on what they are losing on the sale of their current home. Suppose your current home was once worth $1 million, and the larger home you wanted was $1.6 million. At that time, the difference was $600,000. Now suppose your home is worth $850,000, while the larger home has fallen to $1.3 million. Your home is down $150,000, but the home you want is down $300,000. The gap has actually narrowed from $600,000 to $450,000.

A lot of homeowners will say, "But I am losing $150,000 on my home". I understand that feeling. But if your real goal is to move from one home to another, the sale and the purchase should be looked at together. The more useful question is, "How much more money do I need to make the move"?

Of course, a larger home also means higher mortgage payments, property taxes, insurance, maintenance, utilities and future repairs. So I always suggest looking at both sides. First, what is the complete cost of selling and buying? Second, what will your monthly household expenses look like after the move? If both numbers are comfortable, a softer market can actually make moving up more attractive.

Downsizers face a different calculation. Maybe the children have moved out, several bedrooms are hardly being used, and the house is becoming more expensive or more difficult to maintain. If that home is putting pressure on your finances, I would not only ask, "Could I get another $100,000 if I wait two years"? I would also ask, "What would my life look like if I downsized today"?

How much equity could you release? How much could your monthly expenses drop? Would retirement become more comfortable? Would you gain more flexibility? Would the new home still give you the lifestyle you want?

This is where I think the story I mentioned at the beginning becomes important. For that senior homeowner, the real loss was not just that the market price moved lower. The bigger loss was that three years of his retirement plan were delayed while he waited for a price the market was not willing to pay. Time also has value, especially when a property is connected to retirement, family plans or health.

On the other hand, if you are living in your principal residence, you are comfortable there, your family's needs have not changed, your mortgage is manageable and you have no reason to sell, then I do not think you need to do anything just because the market is weak.

Buying and selling a property also costs money. There are commissions, legal fees, moving costs, refinancing expenses and, if you are buying another property, land transfer tax. There is also a lot of time and energy involved. If the home still works for you and your finances are healthy, continuing to live there can be a perfectly rational choice.

For those homeowners, I would be more concerned about preparing for the next mortgage renewal, maintaining enough cash reserve and keeping the household finances healthy than checking the estimated value of the property every week.

Mortgage renewals should also be approached calmly. If you are making your payments, the bigger practical issue is often not whether the lender will suddenly take the house away. The more common problem is simply renewing automatically at an unattractive rate, or finding that switching lenders is more difficult if the property value has declined. So I usually suggest starting the renewal discussion early, comparing offers and thinking about whether your mortgage term fits your plans. If you expect to sell, refinance or move within the next few years, flexibility can be very valuable.

The group I think needs to examine the numbers most carefully today is owners of investment properties with persistent negative cash flow, especially if they were already planning to sell within the next three to five years.

Suppose your property requires a $1,500 monthly subsidy and you already know that you probably want to exit within five years. In that situation, I would lean toward starting to seriously plan the sale now. Not because I know prices will fall. I do not. But we already know three things. You plan to exit. The property is consuming cash. And nobody knows whether the price will return to the previous high within your required time frame.

If waiting for an uncertain recovery requires another $50,000, $90,000 or more, then the question should not simply be, "Can I eventually sell for more"? The better question is, "How much more might I receive, and how much will it cost me to wait"?

There is always a possibility that you sell today and the market rises next year. That risk is real. But the opposite risk is also real. Prices may stay flat. They may fall further. The property may continue to require a monthly subsidy. You may face repairs or vacancy. Or you may need the money sooner than expected. A good investment decision should not depend entirely on the best-case scenario.

I also do not think the choice is always simply "sell” or "hold". Sometimes the right answer is to adjust. Maybe you refinance. Maybe you pay down more expensive debt. Maybe you change the rental strategy. Maybe you reduce expenses. Maybe you build a larger cash reserve. Or maybe you simply decide that you will hold for another six months and then review the situation again.

Real estate decisions do not have to be permanent. A decision to hold today does not mean you must hold for the next eight years. You can look at the numbers again in six months, next year, or whenever your income, family circumstances, interest rates or the market change. The real danger is not deciding to hold today. The real danger is continuing to put money into a property year after year without ever asking whether the original reason for holding still makes sense.

This is also where I think the role of a real estate professional is changing because of AI. Buyers and sellers now have access to much more information. AI can help compare sales, review listings, calculate mortgage payments, summarize market statistics and even generate an initial opinion on value. That is useful, and I think clients should use those tools.

But it also means an agent's value cannot simply be access to MLS data anymore. The value has to be in judgment and execution.

AI may tell you that three nearby houses sold for $1.3 million, but it may not fully appreciate why one house showed much better than another, whether your renovation quality will actually appeal to buyers, whether your layout has a major weakness, or how buyers are reacting when they walk through the property. It also cannot independently manage all of the practical risks when a family is buying and selling at the same time.

Should you buy first or sell first? How should the closing dates line up? If you receive two offers, which one is actually safer? How should the existing mortgage be handled? After all the expenses, how much money will really be left? These decisions need data, but they also need experience, negotiation and execution.

For many Toronto homeowners in 2026, I think the biggest psychological challenge is still being anchored to what the property used to be worth. People tell me, "My house used to be worth $1.5 million", or "My condo used to sell for $900,000". Those things may be true, but they do not change today's market.

We cannot change the price we originally paid. We cannot force the market to return to a previous high according to our schedule. What we can control is our housing needs, our cash flow, our debt, our mortgage, our investment horizon, our retirement plans and our next decision.

So when I sit down with a homeowner today, I usually try to simplify the conversation this way. If it is your principal residence, focus on whether the home still suits your life and whether you can comfortably afford it. If you are moving, focus on the difference between what you are selling and what you are buying, not just the old peak price of your current home. If it is an investment property, focus on cash flow and how long you realistically plan to own it.

The Toronto market will continue to change. Interest rates will move. Inventory will rise and fall. Buyer confidence will change. Different neighbourhoods and property types will recover at different speeds. We do not need to know exactly what happens next in order to make a sensible decision today.

The goal is not to perfectly predict the bottom of the Toronto real estate market. The goal is to make a decision that still works even if your prediction is wrong.



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