The narrative dominating real estate headlines in early 2026 sounds alarming: home prices have "fallen back to pandemic levels." But there's a critical detail buried in the fine print - and it changes everything.

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When most people hear "pandemic levels," they think March 2020: economic freefall, stock market crashes, and genuine uncertainty about the future. The truth? Today's prices aren't returning to that pre-pandemic baseline. They're settling back to levels last seen in 2021 - after prices had already begun their historic climb.

This isn't just semantic hair-splitting. The difference between "early pandemic" and "Spring 2021" represents hundreds of thousands of dollars in many Canadian markets. Let's dig into what's actually happening, city by city, with the data that headlines conveniently gloss over.

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The Great Canadian Housing Surge: A Quick Recap

To understand where we are, we need to remember where we've been. When COVID-19 hit in March 2020, Canada's housing market briefly stuttered. Within months, however, a perfect storm emerged:

• Rock-bottom interest rates (Bank of Canada slashed rates to 0.25%)
• Work-from-home migration (urban exodus to suburbs and smaller cities)
• Pent-up demand (buyers who delayed during initial lockdowns)
• Limited supply (construction slowdowns, hesitant sellers)

The result? Home prices didn't just recover - they exploded. From mid-2020 through early 2022, Canadian real estate experienced one of the most dramatic appreciation periods in modern history. Detached homes in some markets gained $200,000+ in value in under 18 months.

Then came the correction. The Bank of Canada began its aggressive rate-hiking campaign in 2022, and by 2023, the market had cooled significantly. Now, in early 2026, we're seeing the results: prices have indeed dropped from their 2022 peaks.

But "dropped from insane highs" is not the same as "crashed to pre-pandemic lows."

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The Data Tells a Different Story

Let's examine five major Canadian markets - plus Kelowna - to see what "pandemic levels" actually means in real dollars.

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1. Metro Vancouver: The Poster Child for Misleading Headlines

January 2020 (True Pre-Pandemic):

• Composite Benchmark: $1,008,700
• Detached Homes: $1,431,200
• Condos: $663,200

Spring 2021 (Post-Surge "Pandemic Level"):

• Composite Benchmark: ~$1,150,000+
• Market accelerating rapidly

January 2026 (Current):

• Composite Benchmark: $1,101,900
• Detached Homes: $1,850,800
• Condos: $704,600

The Reality: Vancouver's composite benchmark is still 9.3% higher than true pre-pandemic levels. Detached homes are up 29.3% from January 2020. When headlines say "back to pandemic levels," they're referring to Spring 2021 prices - after a year of unprecedented growth.

What this means: A typical detached home buyer in Vancouver is paying $419,600 more than in January 2020, even with the recent "correction."

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2. Greater Toronto Area

January 2020:

• MLS HPI Composite Benchmark: $828,200
• Average Sale Price: ~$839,000
• Market showing early signs of recovery from 2017-2018 correction

2021-2022 Peak:

• Benchmark exceeded $1,200,000 in many segments
• Average prices pushed past $1,300,000 in peak frenzy (Feb 2022)

January 2026:

• Average Sale Price: $973,289
• Down 6.5% year-over-year, but still 16% above January 2020

The Reality: Toronto home buyers today are still paying dramatically more than in true pre-pandemic times. The "correction" has simply removed the most irrational portion of the 2021-2022 bubble.

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3. Calgary

January 2020:

• Average Home Price: ~$425,000
• Market still recovering from 2014-2016 oil crash
• Affordability improving

2023-2024 Surge:

• Massive interprovincial migration
• Detached homes in some districts climbed toward $700,000+ at peak

January 2026:

• Average Home Price: $554,400
• Benchmark: $554,700 (HPI series; note that CREB citywide detached benchmark is higher, at $667,000)
• Down 4.7% year-over-year

The Reality: Calgary is unique. Its "pandemic level" prices are actually closer to 2021-2022 levels - meaning the market surged later than coastal cities. Today's prices are still 30%+ higher than January 2020, driven by Alberta's economic resurgence and population influx.

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4. Montreal

January 2020:

• New house prices rising 6.8% year-over-year
• Market heating up but still affordable by national standards
• Estimated composite benchmark: ~$400,000-$450,000

Pandemic Surge:

• More measured than Vancouver/Toronto
• Steady appreciation rather than explosive growth

January 2026:

• Benchmark Price: $573,300
• Up 5.9% year-over-year
• Detached Homes: $676,900

The Reality: Montreal's market never experienced the same boom-bust volatility. Current prices are approximately 27-32% higher than 2021 levels. The city's "30-35% higher than pre-pandemic" claim fits if comparing to 2021 as a base; it's closer to 50%+ if comparing to early 2020.

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5. Fraser Valley (Surrey, Langley, Abbotsford)

This is where the "back to pandemic levels" narrative gained traction, making it worth special attention.

Early 2020:

• Pre-pandemic market showing recovery signs
• Still below historical peaks

Spring 2021:

• Benchmark crossed $1 million for first time ever
• Remote work driving suburban exodus

January 2026:

• Benchmark: $897,000
• First time below $900K since Spring 2021
• Down 6.9% year-over-year

The Reality: The Fraser Valley benchmark has returned to Spring 2021 levels - not March 2020. This is still significantly higher than true pre-pandemic pricing, when remote work hadn't yet driven the suburban exodus.

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6. Kelowna

2020 (Pre-Pandemic):

• Single-Family Detached: $858,741
• Townhomes: $545,227
• Condos: $367,362

2021 Surge:

• Single-Family: $1,050,667 (+22.3%)
• Townhomes: $648,127 (+18.8%)
• Condos: $439,823 (+19.7%)

April 2022 Peak:

• Single-Family Benchmark: $1,131,800
• Market at all-time high

January 2026:

• Single-Family: ~$1,000,000-$1,150,000 (Central Okanagan median range)
• Townhomes: ~$700,000-$760,000
• Condos: ~$420,000-$460,000 (citywide median)

The Reality: Kelowna hasn't "returned" to pandemic levels at all. Prices have corrected from the 2022 peak but remain dramatically elevated. A detached home buyer today is paying roughly 22-34% more than in early 2020, depending on neighbourhood. Even using conservative citywide medians, buyers are paying 16-20% more than 2020.

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Why the Headlines Get It Wrong (Or Do They?)

The disconnect between headlines and reality isn't entirely accidental. Here's what's happening:

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The "Pandemic Levels" Sleight of Hand

When reporters and real estate boards say "pandemic levels," they're technically correct - if you define "pandemic" as any time between March 2020 and, say, late 2022. But most readers interpret this as "March 2020," when in reality, the comparison point is usually:

• Spring 2021 (post-first-surge)
• Late 2021 (sustained elevation)
• Early 2022 (just before peak)

It's like saying the stock market "returned to pandemic levels" when comparing today's S&P 500 to its 2021 highs - technically true, but deliberately misleading.

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The Benchmark vs. Average Price Confusion

Real estate boards use benchmark prices (a standardized "typical" home) rather than average prices. This is actually more accurate for tracking true market changes, because it controls for the mix of homes sold. But it creates confusion:

• If more luxury homes sell in January 2026 than January 2020, the average price rises even if individual home values haven't changed
• Benchmark prices isolate actual appreciation/depreciation
• Headlines often conflate the two

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The Missing Context: Affordability

Here's what almost no headline mentions: carrying costs.

Even if prices return to 2020 levels (they haven't), 2026 buyers face dramatically different affordability:

January 2020:

• 5-Year Fixed Mortgage Rate: ~2.79%
• Monthly payment on $500,000 mortgage: ~$2,331

January 2026:

• 5-Year Fixed Mortgage Rate: ~3.84% (best insured rate)
• Monthly payment on $500,000 mortgage: ~$2,642
• That's $311/month more, or $3,732/year

Note: Rates vary by lender and product. WOWA reports best rates at 3.74%, while major bank posted rates sit around 4.64-4.89%. The key point: even with modest price decreases, today's buyer pays significantly more over the life of their mortgage than a 2020 buyer did.

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What Does This Mean for Buyers and Sellers?

For Buyers:

The Good News:

• Inventory is higher than during the 2021-2022 frenzy
• Bidding wars are rare; negotiation is back
• Sellers are more realistic about pricing
• Interest rates have stabilized (and may ease further in late 2026)

The Not-So-Good News:

• Prices are still dramatically higher than true pre-pandemic levels
• Monthly carrying costs remain elevated
• The "great deal" headlines suggest doesn't exist
• Competition for well-priced homes remains strong

The Strategy:Don't wait for a crash that isn't coming. Major forecasts from RBC, CIBC, and the Bank of Canada do not project a severe price crash - rather, continued stabilization with modest declines or sideways movement through 2026-2027. If you find a home you love at a price that works with your budget and long-term plans, the exact timing of your purchase matters far less than you think. Real estate is a 25-30 year investment, not a trading game.

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For Sellers:

The Good News:

• Prices haven't crashed
• Equity accumulated 2020-2022 is largely preserved
• Motivated buyers are still out there
• Well-presented homes still sell quickly

The Not-So-Good News:

• Your neighbour's 2022 sale price is irrelevant
• Days on market have increased
• Buyers have more negotiating power
• Overpricing kills momentum fast

The Strategy:Price competitively from day one. In today's market, a home that sits for 60+ days gets stigmatized. Better to price attractively and generate competing offers than to chase the market down with multiple reductions.

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The Bottom Line

Words shape perception, and perception drives behavior. When headlines scream "back to pandemic levels," they create a false narrative of opportunity - or crisis, depending on which side of the transaction you're on.

The truth is more nuanced:

1. Prices have corrected from 2022 peaks - by roughly 10-15% in most markets
2. This correction has brought us to 2021 levels - not March 2020
3. Even 2021 prices were dramatically elevated - representing a year of unprecedented growth
4. Affordability remains challenged - due to higher interest rates offsetting price declines
5. The market is normalizing, not crashing - returning to more typical buying and selling dynamics

If you bought in 2019-2020, you're still sitting on substantial gains. If you bought at the 2022 peak in certain Ontario and BC markets, you may be near break-even or slightly underwater. If you're buying now, you're not getting a pandemic-era deal - you're getting a post-correction opportunity in a market that's found new equilibrium.

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The Bigger Picture

Real estate moves in cycles. The 2020-2022 surge was exceptional - driven by once-in-a-generation factors that won't repeat. The 2023-2025 correction was inevitable - a necessary recalibration after unsustainable growth.

Where we are now? Somewhere in the middle. Prices remain elevated by historical standards, but the frenzy has passed. Buyers have options. Sellers have realistic expectations. It's not a boom, and it's not a bust.

It's just...a market.

And in a normalized market, the fundamentals matter most: location, condition, price, and personal circumstances. Not headlines. Not FOMO. Not fear.

The truth shall prevail - but only if we're willing to look past the misleading shortcuts and engage with the actual data.

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Want to understand what's really happening in Kelowna's real estate market? Contact Coldwell Banker Horizon Realty for honest, data-driven insights that cut through the noise.