January Real Estate Slowdown in Southern Ontario: Storm Impact or Market Shift?

January Home Sales Dip After Major Winter Storm — What It Means for the GTA Market

If you felt like January real estate activity was a little quieter than expected, you weren’t imagining it.

According to the Canadian Real Estate Association (CREA), national home sales dropped 16.2% in January compared to the same time last year. On a month-over-month basis, sales were also down 5.8% compared to December.

And here in southern Ontario? The slowdown was even more noticeable.

The Winter Storm Factor

CREA’s senior economist, Shaun Cathcart, noted that much of the decline was driven by the Greater Golden Horseshoe and southwestern Ontario — areas that were heavily impacted by January’s major winter storm.

In other words, this may not have been a demand problem. It may simply have been a weather problem.

When roads are unsafe, showings get cancelled.
Open houses get postponed.
Buyers stay home.

It doesn’t mean people suddenly stopped wanting to buy. It just means the market hit pause.

But Here’s the Bigger Picture

Despite the slow start, CREA is still forecasting that national home sales will increase by 5.1% in 2026, rebounding from last year’s tariff-related slowdown.

There’s still a lot of conversation around “pent-up demand” — especially from first-time buyers who have been waiting for affordability to improve.

However, Robert Kavcic, senior economist at BMO, made an important point: it’s not just pent-up demand. There may also be pent-up supply.

Many sellers who listed in 2025 and didn’t get the price they wanted simply pulled their listings. Those homes could re-enter the market this spring.

So when the snow melts, we may see both buyers and sellers re-entering at the same time.

Inventory Is Climbing

While sales dropped in January, new listings actually rose 7.3% month-over-month.

At the end of January:

• 140,680 properties were listed for sale across Canadian MLS systems

• That’s up 4.5% from last year

• But still 11.4% below the long-term average for this time of year

This is important.

We are not in oversupply territory — but inventory is building slowly. That gives buyers more negotiating power compared to the ultra-tight markets we saw in previous years.

What About Prices?

The national average home price in January was $652,941 — down 2.6% year-over-year.

CREA’s Home Price Index:

• Down 0.9% from December

• Down 4.9% compared to last year

However, the association still projects the national average price to rise 2.8% in 2026, reaching approximately $698,881.

So we’re seeing short-term softness, but moderate growth is still expected over the course of the year.

What This Means for Southern Ontario & the GTA

Here’s my honest take.

January numbers were likely distorted by weather. Southern Ontario was hit hard, and that absolutely affects activity.

The real test will be the spring market.

If:

• Buyers who were waiting jump back in

• Sellers who pulled listings relist

• And inventory continues to rise

Then we could see a more balanced market — which, in my opinion, is healthier for everyone.

Not the frenzy.
Not the freeze.
Just stability.

For first-time buyers in the GTA, this could be an opportunity window. Prices are softer than last year. Inventory is improving. Negotiating conditions are better than they were during peak competition years.

For sellers, strategy matters more than ever. Pricing correctly, strong presentation, and understanding real-time local data will be key this spring.

Final Thoughts

One snowy month does not define a market.

January gave us a reminder that real estate is influenced by more than just interest rates and headlines. Sometimes it’s as simple as the weather.

But underneath the temporary slowdown, demand hasn’t disappeared. It’s waiting.

And as we head toward spring, that’s when we’ll really see how 2026 shapes up.

If you’re thinking about buying or selling in the GTA this year, now is the time to start planning — not when everyone else jumps back in.

If you’d like a personalized look at what these numbers mean specifically for your neighbourhood, reach out. Every pocket of the market behaves differently, and strategy makes all the difference.