Is Phoenix in a buyer’s market or a seller’s market right now? If you have been hearing “months of supply” and wondering what it means for your price, timeline, or offers, you are not alone. Understanding this one metric can help you set expectations and make smarter moves. In this guide, you will learn what months of supply is, how it plays out across Phoenix and the East Valley, and how to use it in real decisions. Let’s dive in.
What months of supply means
Months of supply estimates how long it would take to sell all current active listings at today’s sales pace. It is a short-term snapshot of market balance and a useful way to gauge competition and leverage.
The simple formula
- Months of supply = Active listings ÷ Average monthly closed sales.
- Example: If there are 4,000 active listings and 800 homes sell per month on average, that equals 5 months of supply.
Industry convention for reading the result:
- Less than 3 months: strong seller’s market
- About 3 to 6 months: balanced market
- More than 6 months: buyer’s market
These thresholds are general guidelines. Local dynamics and price bands can shift what “balanced” feels like.
Variations you might see
Different analysts may calculate months of supply with small tweaks:
- Using pending sales instead of closed sales to reflect near-term demand.
- Averaging monthly sales over the last 3, 6, or 12 months to smooth volatility.
- Counting active listings with or without contingent or coming-soon statuses, depending on the MLS.
How to read it in Phoenix
Why local context matters
A single metro-wide number can hide very different realities by area, price, and property type. In the Phoenix region, it often varies across:
- Cities and neighborhoods, such as central Phoenix compared with the East Valley.
- Price ranges, from entry-level to luxury.
- Property types, including single-family homes versus condos and townhomes.
Typical Phoenix patterns
- Lower-priced single-family homes in family-oriented East Valley areas like Mesa, Chandler, Gilbert, and Queen Creek often show lower months of supply because they turn over faster.
- Higher-priced and luxury segments in parts of Phoenix and nearby luxury submarkets typically show higher months of supply and longer marketing times.
- New home construction and deliveries, which are active in parts of the East Valley, can temporarily add supply and push months of supply higher in specific segments.
Price bands and property types
Looking only at the metro average can lead you astray. Always ask for months of supply by price band and product type, for example:
- Under $400k, $400k–$700k, $700k–$1M, over $1M
- Single-family detached versus condos or townhomes
This view aligns with how buyers shop and how inventory actually competes. Strategy should match the segment you are in.
Seasonality and trend checks
Phoenix tends to see more listings and buyer activity in late winter through spring, then a slower pace in summer and around holidays. Compare month-over-month and year-over-year numbers so you do not mistake seasonal shifts for a lasting trend.
What it means for your strategy
If you are selling
- Low months of supply (tight inventory)
- Expect strong interest on well-presented listings. Multiple offers are possible.
- Tactics: price competitively near market value, stage and photograph early, set clear showing windows, and be thoughtful about contingencies.
- Moderate months of supply (about 3–6)
- Pricing accuracy and marketing quality decide your speed and net.
- Tactics: support pricing with a detailed CMA, highlight condition and updates, and offer flexible showing times.
- High months of supply (over 6)
- Buyers have leverage and timelines can stretch.
- Tactics: consider strategic price adjustments, seller credits, prelisting repairs, and stronger staging to stand out.
If you are buying
- Low months of supply
- Competition can be intense for well-priced homes.
- Tactics: secure a strong preapproval, move quickly on showings, consider escalation clauses or higher earnest money, and shorten timelines where you are comfortable.
- Moderate to high months of supply
- You have room to negotiate.
- Tactics: use days on market and comparable sales to guide pricing, request seller concessions when appropriate, and keep inspection and appraisal protections that fit your goals.
Combine months of supply with other signals
Do not rely on months of supply alone. Pair it with:
- Days on market and list-to-sale price ratio to gauge speed and pricing pressure.
- Pending-to-active ratio to sense current demand.
- Recent comparable sales in your micro-neighborhood for valuation accuracy.
How to find months of supply now
You can compute months of supply or have a local expert pull it for you by city, neighborhood, price band, and property type. A practical approach:
- Pull a current count of active listings for your target area and price band.
- Calculate average monthly closed sales for the most recent one to three months in the same segment.
- Divide active listings by the average monthly closed sales and note the method you used.
For the clearest picture, ask for both month-over-month and year-over-year views, plus related metrics like days on market and list-to-sale price ratio.
Limitations and pitfalls to avoid
- Averages mask extremes. Metro-wide numbers can hide very hot or slow pockets, especially in certain price bands.
- Method matters. Whether you include contingent listings or use one month versus three months of sales will change the figure.
- Timing lags. Closed sales are backward-looking. Pending sales can be more forward-looking but may not be reported the same way across sources.
- New construction and investor-held inventory can distort what “available” means if not tracked consistently.
When you use months of supply to guide a decision, treat it as one input alongside condition, location, and recent comps.
Work with a local guide
Whether you are planning to buy, sell, or invest in the East Valley, you deserve clear numbers and a plan tied to your exact segment. Our team combines local expertise with professional marketing and practical guidance, so you can act with confidence. Ready to interpret today’s months of supply for your neighborhood and price range? Connect with Snow Realty & Property Management for a focused, data-informed plan.
FAQs
How often does months of supply change in Phoenix?
- It is typically updated monthly, and in tight segments it can shift quickly, so compare both month-over-month and year-over-year.
Is six months of supply always a balanced market?
- Six months is a common benchmark, but local structure and price bands can shift what “balanced” feels like on the ground.
What should a buyer do when months of supply is high?
- Use the leverage to negotiate on price and closing costs, while still grounding your offer in condition and comparable sales.
Can new construction in the East Valley change months of supply quickly?
- Yes, large builder deliveries can add inventory in specific segments, raising months of supply until demand absorbs it.
Does months of supply differ for condos versus single-family homes?
- Often yes, since demand and turnover vary by product type, so check months of supply separately for condos and single-family homes.
How do sellers use months of supply to set price?
- Match pricing to your segment: tighter supply supports firmer pricing; higher supply calls for sharper pricing and stronger presentation.
