After fuelling CanadaB次元官网网址檚 economy through the COVID-19 pandemic, the real estate market is showing signs of weakness as home prices fall and bidding wars dissipate.

ItB次元官网网址檚 welcome news for prospective buyers hoping for a better price. But as the busy fall season nears, realtors and economists are at odds over how long the pricing slide will last and how low it will go.

B次元官网网址淭he fall is going to be interesting because weB次元官网网址檙e going to see probably more buyers jumping into the market and you donB次元官网网址檛 need a ton more buyers to provide a little bit more stability to prices,B次元官网网址� said John Pasalis, president of Realosophy Realty Inc. in Toronto.

B次元官网网址淛ust a little bit of a bump in demand could be the difference between homes selling in three, four weeks versus selling in two weeks or selling a lot faster.B次元官网网址�

The average home price is still above pre-pandemic levels, but increasing mortgage rates and inflationary pressures are weighing on the market.

When pandemic lockdowns began in March 2020, the Toronto Regional Real Estate Board said the average home price in the area B次元官网网址� one of CanadaB次元官网网址檚 hottest B次元官网网址� sat at $902,680. Last month, it was $1,074,754, a one per cent hike from July 2021, but a six per cent drop from June 2022.

The latest data from the Canadian Real Estate Association (CREA) showed prices hit $629,971 in July, down five per cent from $662,924 last July. On a seasonally adjusted basis, it amounted to $650,760, a three per cent drop from June. When pandemic lockdowns began in March 2020, the average national price was $543,920.

The association forecast the national average home price will rise by 10.8 per cent on an annual basis to $762,386 by the end of 2022 and hit $786,252 in 2023.

But some economists are anticipating an even greater price reduction.

In June, a trio of Desjardins economists said they expected the average national home price to fall by 15 per cent between its February high B次元官网网址� $817,253 B次元官网网址� and the end of 2023, but because B次元官网网址渨eB次元官网网址檙e almost there,B次元官网网址� they adjusted their forecast in August to predict a drop between 20 and 25 per cent.

B次元官网网址淗ome prices continue to fall and have further to go before they find a bottom,B次元官网网址� said Randall Bartlett, H茅l猫ne B茅gin and Marc Desormeaux, in a report released July 11.

B次元官网网址淭hat said, we still believe home prices will end 2023 above pre-pandemic levels nationally and in all 10 provinces.B次元官网网址�

In anticipation of a drop in prices, agents have noticed prospective buyers sitting on the sidelines of the market in recent months, while sellers come to terms with the fact that their homes wonB次元官网网址檛 fetch as much money as they would have at the start of the year.

Lori Fralic calls it a B次元官网网址渟talemate.B次元官网网址�

B次元官网网址淲e are seeing lowball offers,B次元官网网址� said the Vancouver agent with Keller Williams Realty VanCentral.

B次元官网网址淭hereB次元官网网址檚 lots of bargain hunters out there who are throwing out offers but if they donB次元官网网址檛 have to sell, a lot of sellers are saying, B次元官网网址榥o, sorry, not taking it.B次元官网网址�

ItB次元官网网址檚 a change from the torrid pace of sales and frenzied bidding wars seen earlier in the year and late last year.

Much of the shift is attributable to mortgage rates, which mirror fluctuations in interests rates and can eat into buying power.

The Bank of Canada increased its key interest rate by one percentage point to 2.5 per cent in July in the largest hike the country has seen in 24 years.

Economists foresee the increases continuing and Fralic said theyB次元官网网址檙e already encouraging people who donB次元官网网址檛 need to buy immediately to hold off.

SheB次元官网网址檚 seen a drop in prices in B.C., but said itB次元官网网址檚 not as much of a decrease as many expected.

B次元官网网址淚f people are thinking (prices) are going to plummet, I donB次元官网网址檛 think thatB次元官网网址檚 accurate,B次元官网网址� she said.

B次元官网网址淚f you look at the 10-year average of Metro Vancouver, housing prices are way up and if they do dip, they might dip slightly and come back up. ThereB次元官网网址檚 always been sort of a steady incline with dips along the way.B次元官网网址�

The Real Estate Board of Greater Vancouver said the composite benchmark price for the region B次元官网网址� often CanadaB次元官网网址檚 hottest B次元官网网址� sat at more than $1.2 million in July, a roughly 10 per cent increase from July 2021 and a two per cent drop from June 2022.

B次元官网网址淚tB次元官网网址檚 anyoneB次元官网网址檚 guess how much prices will fall,B次元官网网址� Sherry Cooper, chief economist at Dominion Lending Centres, said.

Markets, she said, tend to be very localized and the surges or drops some see may not be mimicked in others.

For example, she said Alberta has not seen the slowdown many other Canadian markets have because its energy sector is much stronger than it was in the past.

But Cooper noted home sales activity have declined very sharply in the Greater Toronto Area, the Greater Golden Horseshoe Area and in parts of British Columbia around Vancouver.

B次元官网网址淚tB次元官网网址檚 the markets that experienced the 50 per cent increase in home prices that have seen the biggest correction, and thatB次元官网网址檚 what youB次元官网网址檇 expect because those are the most expensive homes in Canada with the largest outstanding mortgages.B次元官网网址�

B次元官网网址擳ara Deschamps, The Canadian Press