Months of Supply
The estimated time it would take to sell all current listings at the current sales pace, calculated by dividing active inventory by the average monthly sales rate. A key metric for classifying market conditions.
Generally, 4-6 months of supply indicates a balanced market. Under 4 months suggests a seller's market with upward price pressure, while over 6 months suggests a buyer's market with downward pressure. Appraisers calculate months of supply for the subject's competitive market segment (similar property type, price range, and location) as part of the neighborhood analysis. UAD 3.6 requires reporting specific supply metrics. Months of supply directly influences the appraiser's market condition conclusion (increasing, stable, or declining values).
Related Terms
Market Conditions
The current state of supply and demand in the real estate market for a particular property type in a defined area.
Absorption Rate
The rate at which available properties are sold or leased in a specific market during a given time period.
Days on Market (DOM)
DOMThe number of days between when a property is listed for sale and when it goes under contract.
Comparable Sale
A recently sold property that is similar to the subject property in terms of location, size, condition, and features, used as evidence to support the appraiser's opinion of value in the sales comparison approach..
More in Market Analysis
View allTime Adjustment (Market Conditions Adjustment)
An adjustment applied to a comparable sale to account for changes in market value between the date of the comparable's sale and the effective date of the appraisal.
Exposure Time
The estimated length of time a property would have been offered on the market before a hypothetical sale at the appraised value on the effective date.
Marketing Time
The estimated time it would take to sell a property starting from the effective date of the appraisal, looking forward.
Comparative Market Analysis (CMA)
CMAAn estimate of a property's value prepared by a real estate agent using recent sales, active listings, and pending sales data.