Seller’s Market vs. Buyer’s Market

If you have ever wondered why homes in one season attract ten offers, then sit for weeks in another, the answer is less about luck, and more about balance—specifically, the balance between how many properties are for sale and how many buyers are actively writing offers. In real estate, we describe that balance as a seller’s market, a buyer’s market, or something in between. Understanding which environment you are in helps you decide when to list, how to price, and what to expect at the negotiation table.

The two core indicators professionals watch

Sales-to-New-Listings Ratio (SNLR)

The SNLR compares how many homes sold in a period to how many new listings hit the market. When roughly 60% or more of new listings sell in the same window, conditions typically favour sellers; when the ratio drops below about 40%, buyers tend to have the upper hand. Ratios between 40% and 60% are usually read as balanced. These thresholds are widely used by Canadian market watchers and industry publications because they translate activity into competitive pressure you can actually feel at showings and offer nights.

Months of Inventory (MOI)

MOI estimates how long it would take to sell the current number of active listings at the recent pace of sales. Lower MOI means tighter conditions. As a rule of thumb often cited in Canadian analysis, less than about four months of inventory points to a seller’s market, four to six months looks balanced, and six months or more signals a buyer’s market. The exact cut-offs can vary by neighbourhood and housing type, but the logic holds: the more supply relative to demand, the more negotiating room buyers gain.

What a seller’s market feels like on the ground

In a seller’s market, listings are absorbed quickly. Well-priced, move-in-ready homes in Toronto, Mississauga, or Vaughan often set offer dates to manage demand, and buyers may waive some conditions to compete. SNLRs above 60% and lean MOI show up as crowded open houses, short time-on-market, and sale prices that lean toward, or above, list price. While this environment can be energising for sellers, it also requires precision. Overpricing even slightly can push a listing past its first wave of buyers, which is when momentum is strongest.

What a buyer’s market looks like in practice

When conditions tilt toward buyers—SNLR dipping below 40% and MOI stretching higher—new inventory outpaces the number of completed sales. Homes tend to stay on the market longer, there is more room to negotiate on price, and conditions like financing and inspection are more common. For buyers across the GTA, this can be the moment to expand your search radius, compare similar homes across Etobicoke, North York, and Durham, and ask for repairs, credits, or favourable closing dates that would have been difficult to secure during a tighter period.

Why the GTA can swing quickly between the two

The GTA is large and diverse, so conditions can split by area and property type. But the swing factors are familiar: interest rates, new-listing behaviour, population growth, and seasonality.

Interest rates

When the Bank of Canada raises its policy rate, mortgage costs rise and demand often cools; when it cuts, borrowing becomes cheaper and demand can strengthen. This policy-rate channel is one of the most important drivers of housing activity in Canada, and it helps explain why market tone can shift within a single quarter.

The “lock-in” effect 

After periods of elevated rates, many owners are reluctant to sell if doing so would mean giving up a lower mortgage they secured earlier. That reluctance can constrain listing supply, keeping inventory tight even when demand is not surging—one reason prices sometimes hold firmer than headlines suggest.

Seasonality and sentiment

Spring traditionally brings more listings and buyers; late summer and mid-winter can be quieter. In a slower season, the same SNLR can feel different street-to-street depending on how “move-in ready” the competition is, and whether you are looking at semis in Mimico, townhomes in Markham, or condos downtown.

How to read today’s conditions in your neighbourhood

Public market summaries are helpful, but averages can mask crucial local detail. A 52% SNLR across the GTA might hide an east-end freehold pocket running at 70%+, and a downtown condo micro-market closer to 40%. Two practical ways to get specific:

Match indicator to property type

Look at MOI and SNLR for your exact segment (e.g., detached in Etobicoke West, or one-bedroom resale condos in City Place). Detached homes can behave differently than stacked towns or boutique lofts, and strategy should shift accordingly. Benchmarks that say “balanced” at the city level can still feel competitive where entry-level listings are scarce.

Track trend, not just one print

One month of data can be noisy. Watch whether MOI is tightening over three months, whether SNLR is edging above or below the balanced band, and whether days-on-market is shortening. Direction often matters as much as level when you are timing a listing or considering an aggressive offer.

Guidance for sellers in a seller’s, balanced, or buyer’s market

If conditions favour sellers

Focus on strategic pricing that invites, rather than repels, early traffic. Strong photos, staging, and a clear offer plan can help harness competitive energy without overshooting value. The aim is to spark urgency while leaving room for your top offer to emerge.

If the market is balanced

Expect more negotiation. Small mis-steps in pricing, presentation, or timing can push you behind better-positioned listings nearby. Consider incentives that broaden your buyer pool—flexible closing dates, turnkey repairs, or a pre-listing inspection to reduce uncertainty.

If buyers hold the cards

Lean into preparation. Fix deferred maintenance, stage thoughtfully, and price with nearby active competition in mind, not just recent solds. In a softer environment, the first week of market exposure still matters; it just takes more precision to earn it.

Advice for buyers across different conditions

In a seller’s market

Confirm financing early, know your ceiling, and be ready to move as soon as the right home appears. If you need conditions (e.g., inspection), structure them in a way that signals seriousness—short timelines, deposits ready, and a clean offer package.

In a balanced market

You can take a breath. Compare more homes, investigate condo documents thoroughly, and negotiate on items that matter to your long-term costs, such as the age of major systems, parking, or locker availability.

In a buyer’s market

Use your leverage, but do not overplay it. Fair, well-supported offers that reference comparable sales, condition, and days-on-market often succeed where “lowball” numbers fail. If you secure a good home at a sensible price, small market swings later matter less than your long-term fit.

Ready to act? Work with a team that lives this data every day

Whether you are aiming to sell at the top of a hot pocket, or buy wisely when leverage shifts your way, you deserve local experts who track micro-trends and execute on them. The Johnson Team blends deep neighbourhood knowledge with proven marketing, negotiation, and guidance across the GTA. From pricing strategies and staging to financing, condo status reviews, and offer tactics, we represent your best interests at every step—and as a buyer, you do not pay us a fee.

If you are ready to start your home search or thinking about selling, contact The Johnson Team today to speak with an agent and move forward with confidence.