Months of Inventory

It’s been a crazy 2021 in real estate!! To see where we are I looked at “Months of Inventory”. This is an indicator of if no new listings happened, how long would it take for the inventory to be depleted. Months of Inventory is calculated by dividing the current month’s inventory by a rolling 12-month calculation of Pending Sales. A market is balanced when it’s between 4-6 months of inventory. When it’s lower than 4 months, it’s a sellers market and above 6 months, it’s a buyers market.

The graphs below are an indicator of why the market has been so crazy. These are for Single Family Homes and graphs Months of Inventory since 1/1/2020.

The first graph is for San Luis Obispo (blue), Paso Robles (red), and Arroyo Grande (green). The last datapoint is July 31, 2021.

The next graph is North Coast. Morro Bay (blue), Los Osos (red), and Cayucos (green)

The last graph is Pismo Beach (blue) and Avila Beach (red)