What 'Months of Inventory' Actually Tells You About a Market
Real estate reports throw around a lot of jargon, but "months of inventory" is one of the few numbers that's actually worth paying attention to, once you know what it means.
The simple definition
Months of inventory is an estimate of how long it would take to sell every home currently listed for sale, at the current pace of sales, if no new listings came onto the market. If there are 100 active listings and homes are selling at a rate of 25 per month, that's 4 months of inventory.
Why it matters more than a single price number
A single average price can be misleading, it moves around based on what happened to sell in a given month, not what the underlying market conditions actually are. Months of inventory gives you a cleaner read on supply and demand.
- Low months of inventory (roughly under 2) tends to favour sellers, not enough homes to go around, so buyers compete.
- High months of inventory (roughly above 4 to 5) tends to favour buyers, more choice, less urgency, more room to negotiate.
- Anything in between is generally considered balanced.
What it looks like here right now
Chatham-Kent's months of inventory sat at 4.6 at the end of May, up from 3.4 the year before and well above the area's long-run average of 2.4 for that time of year. That's a real, measurable shift, not just a vibe.
How to actually use this number
If you're selling, a rising months-of-inventory number is a signal to price carefully and present your home well from day one, since buyers have more options to compare you against. If you're buying, it's a sign you can afford to be a little more selective and a little less rushed than buyers were a couple of years ago.
It's not a perfect predictor of anything, markets shift fast, and local conditions vary block by block, but it's a far more honest snapshot than a single average price ever will be.