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August was the first full month under new stricter mortgage rules . Homes for sale in Toronto's Rosedale area June 13, 2012. (Moe Doiron/The Globe and Mail)Moe Doiron/The Globe and Mail

It's a dramatic moment in Canadian real estate markets right now as everyone wonders whether a sales slump in August will lead to a downturn that lasts through the fall.

In Toronto, agents are still – for the most part – brimming with optimism. August is typically sleepy, they point out, and September's market has been brisk so far.

Open houses are still lively for single-family dwellings, which tend to sell with multiple offers. A change in mood does seem to have infected the condo market.

Condominium units are slower to sell and agents are less likely to set an offer date, says Brian Elder of Royal LePage Real Estate Services Ltd.

"It's not happening in the condo world."

Bu for single-family houses, new listings are coming along, says Mr. Elder, and first-time buyers haven't disappeared.

"I think we're going to just motor along."

Bank of Montreal economist Robert Kavcic points out that August was the first full month under stricter mortgage rules so it's no surprise to him that sales were softer that month.

He also notes that this phenomenon spread across the country.

In Toronto, he points out, sales in August fell 7.8 per cent on a seasonally adjusted basis from the same month last year. Prices increased 6.1 per cent in August compared with August, 2011.

At Capital Economics, bearish economist David Madani believes a long-awaited correction has started.

He says a change in prices tends to lag a shift in the sales-to-listings ratio. Looking at the national market, he says prices may continue to tread water for a few more months, but he is forecasting a decline of 25 per cent over the next few years.

Broker Patrick Rocca of Bosley Real Estate Ltd. says buyers he deals with still seem confident. He sold two houses this week with asking prices of more than $1-million each. One property received two offers; the other three.

He's still setting offer dates for houses in the $600,000 to $1.2-million range, which continues to be a strong segment of the market.

The rabidness of the spring market has cooled, he says, and a bidding war might involve two or three parties instead of 12 or 15, but he still sees robust demand.

"I'm not seeing any change in the mindset of the buyer."

He does wonder if the next couple of weeks will bring more market jitters but he's convinced that next spring will be as hectic as usual.

"I've never had a bad spring."

Tell us what you think: Will Toronto's housing market continue to cool in the coming months or will buyers be back in full force?