Every month a headline announces that the market is "up," "down," or "shifting" — but the figure that makes the headline is rarely the one that should shape your decision. Three quieter indicators tell you far more than any average sale price ever will.
Start with the question the headline can't answer
An average or benchmark price tells you what already happened. It says nothing about the balance of power between buyers and sellers, or where conditions are heading next. For that, watch three indicators that measure supply, competition, and momentum: months of inventory, the sale-to-list ratio, and days on market. Read together, they turn a market update from a news item into a decision tool.
Months of inventory: who holds the leverage
What it measures
Months of inventory (MOI) estimates how long it would take to sell every active listing at the current pace of sales, assuming nothing new came on the market. You calculate it by dividing the number of active listings by the number of sales in a month.
How to read it
MOI is the single best gauge of supply-and-demand balance. A widely used rule of thumb:
- Under roughly four months: fewer choices and more competition — conditions tend to favour sellers.
- Roughly four to six months: relatively balanced.
- Over roughly six months: more selection and negotiating room — conditions tend to favour buyers.
Watch the direction as much as the level. Rising MOI means supply is outpacing demand, so the market is cooling and tilting toward buyers. Falling MOI means the reverse.
Sale-to-list ratio: how much competition there is
What it measures
This ratio compares the final sale price to the last list price. At 100 per cent, a home sells for exactly its asking price.
How to read it
- Above 100 per cent: buyers are frequently paying over asking — a sign of competition, sometimes multiple offers.
- Near 100 per cent: homes are selling close to asking.
- Below 100 per cent: sellers are accepting less than they asked, and buyers have room to negotiate.
A rising ratio points to a heating market; a falling ratio points to a cooling one. One caution: the ratio is only as honest as the list prices behind it. In some neighbourhoods, deliberately low listing strategies can push the ratio above 100 per cent without the market being as frantic as it looks — which is exactly why you read it alongside the other two indicators.
Days on market: how much momentum
What it measures
Days on market (DOM) is the time from listing to accepted offer. Use the median rather than the average — a handful of very slow or stale listings can drag the average up and mislead you.
How to read it
- Falling DOM: homes are selling faster, so demand is strong and momentum is building.
- Rising DOM: homes are sitting longer, so demand is softening.
DOM is a momentum indicator, and it often turns before price does. That makes it an early warning that a market is shifting.
Read them together, not in isolation
Any single indicator can mislead. Together they corroborate one another:
- Falling MOI + rising sale-to-list + falling DOM = a strengthening seller's market.
- Rising MOI + falling sale-to-list + rising DOM = a softening market moving toward buyers.
- Mixed signals usually mean a market in transition — the moment when timing and pricing matter most.
Three things that change the picture
- Location. "The market" is really thousands of micro-markets. Greater Vancouver, the Okanagan, and Calgary can move in different directions in the same month — and so can two neighbourhoods in the same city. Always filter to your area, property type, and price band.
- Seasonality. Spring and fall are typically busier than mid-winter. Compare like periods with like rather than reacting to a normal seasonal dip.
- Property type. Detached houses, townhomes, and condos each have their own supply and demand. A blended number hides the real differences between them.
What this means for your decision
If you're selling, these indicators tell you how aggressively to price and what to expect on timing — the starting point for any honest home evaluation. If you're buying, they tell you how much competition to plan for and where you genuinely have room to negotiate. Either way, the goal isn't to predict the market perfectly. It's to act with a clear read of where the leverage sits right now.
A regional headline is a starting point, not an answer. When you'd like these three indicators filtered down to your neighbourhood and property type, that's a conversation worth having — explore market context, see what's active near you in our listings, or reach out and we'll walk through what the numbers say for your situation.