We've Officially Crossed Into a Buyer's Market — 6.6 Months of Inventory
For the first time in this cycle, London Ontario's months of inventory has cleared the 6.0 threshold. Here's what the January 2026 LSTAR data means for buyers, sellers, and the spring market ahead.
January 2026 at a Glance
January 2026 delivered a clear verdict: London Ontario has officially transitioned into buyer's market territory. With 341 homes sold — down 10.3% year-over-year — and active listings climbing 12.0% to 2,257, supply is building while demand softens. The result is 6.6 months of inventory, the first reading above 6.0 in this entire cycle and the textbook marker of a buyer's market.
The sales-to-new-listings ratio hit just 32.2% — the lowest reading in our 12-month series. A balanced market sits between 40–60%. At 32.2%, the market is clearly tilted in favour of buyers.
"6.6 months of inventory. A sales-to-new-listings ratio of 32.2%. For the first time in this cycle, the data is unambiguous — London Ontario is in a buyer's market."
Ryan Hodge & Sandra Tavares · The Realty Firm Inc. BrokerageHPI Benchmark Prices — The Number That Matters
When analyzing the market, the HPI (Home Price Index) benchmark is the most reliable pricing metric. Unlike average or median sale prices, the HPI measures the price of a "typical" home in the market — it isn't skewed by a handful of high-value or distressed sales. In January 2026, benchmark prices are down 8.6–8.8% year-over-year across all property types.
| Property Type | HPI Benchmark | Year-Over-Year |
|---|---|---|
| Composite (All Types) | $558,000 | ▼ 8.6% |
| Single-Family Detached | $614,000 | ▼ 8.8% |
| Townhouse / Row | $448,300 | ▼ 8.5% |
The average sale price of $624,550 shows only a 0.6% decline year-over-year — but this figure is skewed by high-value outlier transactions and should be read alongside the HPI. The median sale price of $585,000 edged up 0.9% — indicating the mid-market is holding better than the premium segment, but the benchmark decline tells the fuller story.
The sale-to-list price ratio came in at 96.5%, meaning buyers are successfully negotiating approximately 3.5% off asking prices on average. Sellers are conceding ground, and homes are spending a median of 47 days on market before selling.
The Inventory Story: Why 6.6 Months Is the Key Number
Months of inventory measures how long it would take to sell all current active listings at the current pace of sales. The generally accepted thresholds are: above 6.0 = buyer's market; 4.0–6.0 = balanced; below 4.0 = seller's market. At 6.6 months, London has moved decisively past that buyer's market threshold for the first time this cycle.
New listings came in at 1,060 — down 6.6% year-over-year, suggesting some sellers are choosing to wait. But because sales have dropped faster than listings, inventory continues to stack. Active listings of 2,257 represent a 12.0% increase from January 2025 — buyers in January had significantly more choice than a year ago.
The 47-day median days on market is a practical signal for sellers: homes priced correctly will sell, but the days of multiple offers in the first weekend are largely over in this market. Preparation, pricing, and positioning matter more now than they have in years.
Buyers and Sellers: How to Navigate This Market
Your Leverage Is Real — Use It
- More inventory means more choice — take your time, do proper due diligence
- 96.5% sale-to-list ratio means negotiation is expected — don't offer full ask on a stale listing
- 47-day average DOM: the market will wait for you in most price bands
- Bungalows are still in tighter supply — move faster if that's your target
- Rate environment is as good as it's been; don't wait for a crash that may never come
- HPI down 8.6–8.8% YoY — you're buying at a meaningful discount from peak values
Price Is Everything Right Now
- 341 people bought in January — those sellers sold; the market isn't dead
- Homes sitting at 47 days median: overpriced listings are being punished
- Buyers have options at 2,257 active listings — your home must stand out
- Compete on condition and presentation, not just price
- The 3.5% gap from list to sale is the new normal — price with that buffer in mind
- Spring inventory will likely increase — listing sooner gives you less competition
Bank of Canada, CREA, and the Bigger Picture
London's buyer's market conditions are running ahead of the national curve. Nationally, Canada's housing market remains technically balanced — but the economic environment is clouding the outlook for spring 2026.
The Bank of Canada held its overnight rate at 2.25% at its April 29, 2026 meeting, with the next announcement scheduled for June 10, 2026. Most major bank economists — TD, RBC, and National Bank — forecast the rate to hold at 2.25% through the remainder of 2026. However, a global oil price spike tied to Middle East conflict has pushed bond yields higher, resulting in upward pressure on fixed mortgage rates.
CREA downgraded its 2026 national forecast in April 2026, now projecting just 1% growth in sales nationally — down from a January forecast of 5.1%. The national average home price forecast sits at roughly $688,955 for 2026, with Ontario specifically expected to see essentially flat price growth. For first-time buyers, the pent-up demand story is real — CREA's long-standing thesis is that sidelined buyers will eventually enter the market — but rate uncertainty is delaying that re-entry.
Over one million Canadian mortgages are set to renew in 2026, many of which were locked in at sub-2% rates in 2021. CMHC and the Bank of Canada have flagged significant payment shock risk for these homeowners, with monthly payments potentially rising 15–40%. Some of those renewals may trigger new listings — worth watching as an additional inventory signal through the year.
What to Watch in the Months Ahead
London Ontario has reached a milestone: the official buyer's market threshold has been crossed. This doesn't mean a crash is imminent — HPI prices are down 8.6–8.8% year-over-year, not in freefall — but it does mean the cycle has fundamentally shifted from the seller-dominated years of 2020–2022.
The key variable for spring 2026 is whether inventory stabilizes or continues to climb. If new listings surge as warmer weather arrives and mortgage renewal pressures intensify, the buyer's market could deepen. If sellers hold back and demand begins to recover — aided by steady rates and pent-up buyer interest — the market could gradually rebalance.
Watch these signals: the sales-to-new-listings ratio (needs to climb back above 40% for balance), the months of inventory trend, and whether days on market begins to compress. A reading of 6.6 months in January with spring inventory still to come suggests buyers will remain firmly in the driver's seat through at least Q2 2026.
If you're thinking about buying or selling in this environment, the strategy matters as much as the timing. This is a market that rewards preparation and punishes assumption.
Ryan and Sandra give you straight data, no spin — and a strategy built for the market as it actually is, not as it was.
Book a Consultation
Ryan Hodge & Sandra Tavares · The Realty Firm Inc. Brokerage
📞 519-601-1160 ·
✉ ryan@therealtyfirm.ca ·
🌐 www.ryanhodge.ca
734 Wellington Street, London, Ontario N6A 3S4
All market data sourced from LSTAR (London and St. Thomas Association of REALTORS®). Not intended as financial or investment advice.
