What if you could tell, at a glance, whether Salt Lake City favors buyers or sellers right now? Months of inventory gives you that snapshot. If you are planning a move in Salt Lake City or broader Salt Lake County, understanding this one metric can help you set the right timeline, price with confidence, and negotiate smarter. In this guide, you will learn what months of inventory means, how it is calculated, and how to use it in real decisions. Let’s dive in.
Months of inventory explained
Months of inventory, sometimes called months’ supply, estimates how long it would take to sell all active listings at today’s sales pace if no new homes came on the market. It is a quick way to gauge the balance between supply and demand.
- Around 6 months is often considered a balanced market.
- Less than about 6 months points to a seller’s market. Under roughly 3 months is a strong seller’s market.
- More than about 6 months suggests a buyer’s market.
These thresholds are widely used by industry analysts and are helpful rules of thumb when you evaluate conditions in Salt Lake City or Salt Lake County.
How to calculate months of inventory
The basic formula is simple:
- Months of inventory = Active listings ÷ Average monthly closed sales.
You can choose different time windows for average monthly sales:
- Past 12 months divided by 12 to smooth out seasonal swings.
- Past 3 months divided by 3 to be more current.
- Last 30 days for the most up-to-date snapshot, though it can be noisy.
If you have access to MLS data, here is a quick checklist:
- Pull active residential listings at month end for your area of interest.
- Count closed sales for the past 12 months, then divide by 12.
- Divide active listings by the average monthly closed sales number.
- Repeat for the city, the county, your neighborhood, and your price range to compare.
Note that some publishers use pending sales instead of closed sales or include different property types. Be sure to match your method when you compare numbers.
Why MSI matters in Salt Lake City
Salt Lake City sits at the center of a fast-growing region, with strong in‑migration and a diverse job base that includes tech, health, finance, and public sector employers. This growth supports housing demand, which affects months of inventory. Mortgage rate changes can also shift demand quickly, which is why MSI can move in a short period.
On the supply side, new construction in Salt Lake County helps add inventory, but geography, zoning, and infill patterns limit where and how fast new homes can be built. In many years the region has run tighter than national inventory, but the exact level varies by season, price point, and neighborhood.
City vs. county: reading the signals
Salt Lake City and Salt Lake County often move together, yet they are not identical. City neighborhoods can see different rhythms than suburban areas. For example, downtown condos, Avenues single-family homes, and Millcreek area properties can each show distinct months of inventory at the same time. Reviewing both city and county MSI gives you the broader context plus a local pulse.
When comparing city and county:
- Look at a 3 to 5 year trend line to understand the range of normal.
- Check the same property type across areas, such as single-family only or condo only.
- Use the same calculation window, like 12-month averaged sales, for apples-to-apples comparisons.
Micro-markets: price and neighborhood
Months of inventory is an average. Your experience depends on your price range and location.
- Entry and mid-market tiers can be very tight, with faster pace and more competition in popular city pockets like Sugar House or Rose Park.
- Upper-tier and luxury segments can carry more inventory and longer marketing times at certain points in the cycle.
- Condos and single-family homes behave differently, especially near downtown and transit corridors.
Always check MSI for your neighborhood and price band. A countywide average might read balanced while your segment is clearly tilted toward sellers or buyers.
What changes MSI fast
MSI is a ratio of two moving parts, which makes it responsive:
- Mortgage rates that move up or down can quickly affect buyer demand.
- New listings, withdrawals, and seasonal patterns shift the active count.
- Job gains or losses change local confidence and household formation.
- New-construction deliveries add supply, but many units never appear in MLS feeds.
Because both the numerator and the denominator are relatively small, changes in either one can move MSI in a noticeable way.
Buyer tips in low vs. high MSI
If months of inventory is low, it tends to be a seller’s market:
- Expect faster days on market and more multiple-offer situations in constrained price bands.
- Get fully pre-approved, know your must-haves, and be ready to write quickly.
- Keep offers clean and timelines tight when possible. Consider flexible terms that matter to the seller.
- Expand your search by neighborhood or price bracket if your top choice is ultra-tight.
If months of inventory is high, it tends to be a buyer’s market:
- You have more leverage on price and terms. Take time to compare options.
- Preserve inspection and financing protections where appropriate.
- Ask about concessions like rate buydowns or closing credits when the data supports it.
Seller strategy using MSI
When months of inventory is low:
- You may price more confidently, but accurate comps still matter.
- Prepare for quick showings and plan a launch window that captures peak attention.
- Avoid overpricing in a shifting environment. Monitor feedback and adjust early if needed.
When months of inventory is high:
- Focus on presentation and pricing to stand out. Staging and professional media are difference makers.
- Consider targeted incentives, such as a small credit or rate buydown, to widen the buyer pool.
- Review timing to minimize carrying costs and maximize exposure.
How to check current MSI
To get the most accurate, local read on months of inventory, use these sources and note the date and method:
- Utah Association of REALTORS for county-level monthly stats.
- Salt Lake Board of REALTORS or your MLS for neighborhood and zip-level data.
- Kem C. Gardner Policy Institute for regional demographic and housing context.
- U.S. Census Bureau Building Permits Survey for new supply signals.
- Freddie Mac’s mortgage rate survey for rate trends that can sway demand.
When you quote MSI, state the calculation method, property type, and time window. For example, “Salt Lake City single-family MSI, active listings at month end divided by average monthly closings over the past 12 months.” Include caveats for off-MLS new construction and small-sample volatility in narrow segments.
Our approach to your move
You deserve more than a headline number. You deserve a plan built on real data and premium presentation. At Utah’s Finest Realtors, we pair neighborhood-level market reads, including months of inventory by price band, with white-glove listing services like staging, professional photography, and a custom video for every listing. For buyers, we match your lifestyle goals with on- and off-market opportunities and move fast when your segment is tight.
Ready to see how today’s MSI shapes your timing and pricing? Talk with the team at Utah’s Finest Realtors and get your instant home valuation.
FAQs
What is months of inventory in real estate?
- It estimates how long the current active listings would take to sell at today’s sales pace if no new homes came to market.
What number signals a seller’s market in Salt Lake City?
- Industry convention often treats under 6 months as a seller’s market and under about 3 months as a strong seller’s market, though each segment varies.
How often is months of inventory updated for Salt Lake County?
- Most MLS and market reports publish monthly, and some national trackers offer more frequent snapshots.
Why does months of inventory change so quickly?
- MSI is a ratio of active listings and monthly sales, so shifts in either number, such as new listings or rate-driven demand, can move it fast.
Is months of inventory the same across Salt Lake City neighborhoods?
- No. High-demand areas and lower price tiers typically show tighter supply than luxury segments, so always check your specific neighborhood and price band.
Should I wait for a better MSI before listing my home?
- It depends on your goals, carrying costs, and risk tolerance. MSI is one input among many, so align timing with your personal and financial needs.
