Months of inventory

Months of inventory (MOI) is active listings divided by the number of sales per month: how long everything currently for sale would take to sell if buying continued at today’s pace and nothing new was listed. It is the market’s fuel gauge — a stock measure that tells you how much supply stands between sellers and scarcity.

Reading the gauge

Lower means tighter. When a market carries only a couple of months of supply, well-priced homes attract competition quickly and sellers set terms. As the figure climbs past the balanced band — roughly four to six months by the usual Canadian convention — choice accumulates on the buyer’s side, days on market stretch, and list prices start doing the negotiating. The thresholds are folklore rather than law, and they run differently by segment: two months of detached supply and two months of downtown condo supply have rarely meant the same temperature.

MOI and its siblings

MOI answers a different question than the sales to new listings ratio. SNLR watches the flow — are this month’s new listings being absorbed? MOI watches the stock — how much total supply has accumulated? The pair can disagree, and the disagreement is informative: strong absorption against a deep backlog of inventory reads very differently than weak absorption in a thin market. Days on market then adds the speed dimension. Together the three tell you where the market is; any one alone can mislead.

The fine print

Because it divides a point-in-time count by a monthly pace, MOI is sensitive to both numerator games (what counts as “active”? are conditionally sold homes included?) and denominator noise (one slow month distorts the ratio). Boards also publish it at the market level, where mix effects hide — a city figure blends property types and neighbourhoods that behave nothing alike.

On BrokerFold sites, MOI is one of the figures computed directly from board data for the market report panels, refreshed automatically as sales close and inventory moves — a firsthand calculation, not a number retyped from someone’s newsletter. Where a slice of the market is too small to support an honest figure, the panel says so rather than serving a statistic built on a handful of sales.