London, Ontario's housing market isn't in free fall or in a frenzy — it's in a bottleneck, and that bottleneck is mostly psychological. Sellers anchored to 2022 peak prices are listing at numbers buyers won't validate. Buyers with the means to purchase are watching and waiting for the price to match the value. The result: high inventory, low movement. Behavioural economics calls this loss aversion — the proven tendency for the pain of a loss to feel twice as powerful as the pleasure of a gain. The sellers and buyers who understand this dynamic are the ones transacting. The ones who don't are waiting for a market that isn't coming back. Ty Lacroix, Broker at The Envelope Real Estate Group, has spent 24 years helping London clients read the psychology behind the numbers — and act accordingly.
If you've been watching the London, Ontario housing market lately, you've probably felt it.
There's a tension in the air. We aren't in a free-fall. We aren't in a frenzy. We're in a bottleneck — and it's not mainly about interest rates or supply chains. It's psychological.
The Behavioural Economics Behind the Stalemate
In behavioural economics, there's a concept called Prospect Theory. It tells us that the pain of a loss is psychologically about twice as powerful as the pleasure of an equivalent gain. That single quirk is doing more to freeze the London market right now than any interest rate announcement.
Here's how it plays out on both sides of the transaction.
The seller's paralysis. Many sellers are sitting on five-plus months of competition but refuse to compete. They're anchored to the peak prices of 2022. Selling for today's market value feels like losing equity — even when that equity only ever existed on paper, in a moment that has since passed. So they list at yesterday's price and wait. The home sits. The days-on-market clock runs. The listing goes stale. And the seller's negotiating position erodes quietly while they hold out for a number the market stopped paying two years ago.
The upper-bracket buyer's discipline. If you're a buyer in the higher price ranges, you likely have the means and the intent to purchase. You can see the inventory — there's plenty of it. But you're disciplined. You aren't willing to validate a seller's nostalgia with your capital. You're waiting for the price to reflect the value, not the seller's memory of what the market once was. And with five months of inventory giving you choices, you can afford to wait.
High Inventory, Low Flow
The result is a specific kind of frustration: the houses exist, but the transactions don't.
Buyers are saying: "I see the house, but I'm not paying that."
Sellers are saying: "I have the house, but I'm not taking less."
Both positions feel rational to the person holding them. That's what makes this kind of market so stubborn — nobody feels like they're being unreasonable, and yet nothing moves.
How to Win in a Stalemate
The sales are happening. Just not where you'd expect to see it from public listing sites. The movement is concentrated in listings where the psychology has already shifted — where the seller has accepted today's market instead of waiting for yesterday's to return.
If you're a buyer, the opportunity is in identifying sellers who have moved past loss aversion and are ready to transact at current market value. Those are the listings where you have real negotiating room and where a well-structured offer lands. Chasing the stubborn listings wastes your time and your leverage.
If you're a seller: five months of inventory is your competition, not your comfort. Buyers have choices — more than they've had in years. To move your home in this market, you need to be the sharpest value in the pile, not another overpriced listing giving buyers a reason to keep looking. Pricing ahead of the market, not behind it, is the only way through the bottleneck.
The inventory is there. The question — for both sides — is whether the price reflects the reality of today's market or the memory of a different one.
I help my clients tell the difference. And I tell them the truth about which side of that line they're on, before it costs them.
Ready to stop watching and start moving? Reach out for a private conversation — I'll give you a straight read on where the real opportunity is right now. No pressure, no pitch.
Also find me at tylacroix.com and Totally Preachless
