The real estate market in Ontario largely pauses while schools send their students off for March break, but the end of the holiday is likely to bring a crop of new listings in cities around the province.

In Barrie, Ont., the market is reaching balanced territory as buyers begin to move off the sidelines, says Shawna Toole, a real estate agent with Right at Home Realty.

She notes that sales and prices have started to edge up again.

The Barrie and District Association of Realtors saw 4,336 transactions in February, says Ms. Toole, which is about 39-per-cent below the 7,130 recorded in February, 2022. In December sales dipped to 2,905.

Sales in Barrie became more tilted towards a buyers’ market after the Bank of Canada began raising interest rates in March, 2022.

The city about one hour north of Toronto also saw one of the most dramatic run-ups in prices during the pandemic as people from around Ontario migrated to the shore of Lake Simcoe. Barrie was especially popular because it offers plenty of opportunities for outdoor recreation and easy access to cottage country.

“I feared for people,” Ms. Toole says of the buying sheets during the pandemic. “You’re going to spend $150,000 over ask for this already over-priced house? Things were just getting way out of hand.”

Ms. Toole says some Barrie residents sold out at the peak and then decided to rent for a while, move into a trailer, or head south for a few months. Now some are returning to the market to buy. Others are first-time buyers.

The average price for a three-bedroom detached house was $680,000 in February, she notes. That’s up from $650,000 in January and $640,000 in December.

In February of last year, a typical three-bedroom detached was trading hands for $875,000.

Ms. Toole notes that have higher interest rates have made it difficult for prospective buyers to obtain a mortgage. Buyers who could qualify for a $700,000 loan in the past now only receive approval to borrow about $500,000.

But now that prices have come down by approximately $200,000 for an average house, purchasers are willing to take on a mortgage at a higher interest rate with the hope that rates will come back down before too long.

Ms. Toole says areas such as Bear Creek and Innisfil are popular with buyers, who favor properties close to GO Transit train and bus stations in south Barrie for commuting to Toronto.

But some people who are relocated to communities without GO service are now considering that decision if they are being called back to their workplaces, she added. Residents of Angus and Wasaga Beach, for example, have less access to transit.

“You’d better not work in Toronto because it’s a long haul.”

In a balanced market, sales are picking up but bidding contests are still in the distant past, adding Ms. Toole. Properties languish when sellers are unrealistic about current prices.

“The ones that are sitting are the ones who think it’s worth what it was a year ago.”

Ms. Toole says investors are still reluctant to purchase in the current market because with interest rates, property taxes and utility costs are so elevated, rents don’t cover the expenses. Long delays in Ontario’s legal process also discourage landlords who may need to evict tenants for non-payment of rent, he says.

As a result, some potential investors are looking to buy in Alberta and Nova Scotia, where they figure landlords have more clout.

As for sellers, some homeowners who purchased at lofty prices during the pandemic would have to sell for a lower price today. To avoid locking in a loss, some are renting out properties instead or leaving them vacant.

Others are people who purchased a condo townhouse or detached house in a new sub-division with the intention of selling it upon completion.

“They’re not going to make what they bought it for,” she says.

Some of those investors are unable to obtain a mortgage now, she says, so they are scrambling to borrow extra funds from family or private lenders.

Many of those properties end up on the rental market as well, she says.

“Six months ago I couldn’t find a rental. Now I can find a lot of rentals but they’re extremely high-priced.”

Anita Springate-Renaud, broker with Engel & Volkers, says agents are receiving calls for evaluations from homeowners in parts of Ontario such as Collingwood, Owen Sound and Muskoka. Many are considering selling as the weather improves.

Some prospective sellers are downsizing from a large property or letting go of a vacation home. Others purchased in remote areas and are now gravitating back towards larger cities.

Collingwood’s position on the edge of Georgian Bay made the city popular during the pandemic among people who pursued outdoor sports such as skiing, sailing and hiking. To the north-west, Owen Sound provided more affordable properties on an inlet of Georgian Bay.

Ms. Springate-Renaud says Collingwood in particular saw a strong run-up in prices. Many times, she saw fierce bidding by people who sold their property in Toronto and then used the funds to buy in smaller cities.

If they decide to sell now, they are likely looking at a loss, she says.

“They way overbid everybody else. If it was listed at $999,000, they would offer $1.4-million. They’re not going to get that back.”

Smaller markets are more susceptible to price swings than the Greater Toronto Area, she adds.

Ms. Springate-Renaud did not expect to see listings rising in cottage country until farther into the spring.

“Muskoka doesn’t start picking up until things melt.”

But judging by the number of calls Engel & Volkers is receiving, she expects a busy spring.

Homeowners who are struggling with higher interest rates will typically sell a cottage or ski chalet before their principal residence, she adds.

Housing affordability improved in Canada in the fourth quarter of last year, according to Kyle Dahms and Alexandra Ducharme, economists at the National Bank of Canada.

The shift ended the longest sequence of declining home affordability since the 1986-1989 interlude, they say.

Home prices declined at the fastest pace since 1990 during the quarter, but economists are stressed, the median home is still not affordable when they look at the mortgage payment as a percentage of income.

During the fourth quarter, the benchmark mortgage rate for a five-year term rose, but house prices fell and incomes continued to increase.

Victoria, Hamilton and Toronto were the markets that improved the most on the affordability scale, while Edmonton and Calgary became less affordable.

Ms. Dahms and Ms. Ducharme expect affordability will improve in the coming quarters as mortgage rates peak, listings rise, and home prices continue to decline.