Everyone Quoted 4.9 Months of Supply. Oakland County Is at Two.

The National Association of Realtors released its August existing home sales report on September 10, and one figure did all the traveling: 4.9 months of supply, the highest reading in more than ten years. It got written up everywhere as the moment the market handed the keys to buyers. It is a real number. It is also a fraction, and almost nobody who repeated it looked at the bottom of it.

Months of supply is inventory divided by the current monthly sales pace. That means it can rise two ways: more homes come to market, or fewer of them sell. In August, both happened at once.

The Denominator Did Some of the Work

Sales ran at a 3.98 million annualized pace last month, down 2.0 percent from July and 1.2 percent from a year ago. Unsold inventory finished August at 1.62 million homes, up 5.9 percent year over year. Run the arithmetic and supply moved from roughly 4.6 months last August to 4.9 this August. The larger share of that came from listings, and a real slice of it came from homes simply not trading. That distinction matters. A market with more choice and a market with fewer closings look identical in a headline and nothing alike when you are standing in one.

The price line is the tell. NAR put the national median at $429,100, up 1.6 percent and the 38th consecutive month of year over year gains. Freddie Mac's September 10 survey had the 30 year fixed at 6.76 percent, up from 6.71 the week before and 6.35 a year ago, with the 15 year at 6.09 percent. Sales cool when borrowing costs climb. Prices do not fall simply because the transaction count does, and so far they have not.

What 4.9 Looks Like From Oakland County

The Midwest posted the steepest month over month sales drop of any region in August, down 3.1 percent to a 940,000 pace, and its median price still rose 3.3 percent to $340,400. Southeast Michigan sits inside that number, and the local version is sharper. Oakland County's median sale price reached $401,750 in the most recent reporting, up 4.4 percent. Active listings climbed 15.2 percent to roughly 3,414, which sounds like relief until you divide it by how quickly this county still absorbs homes. That works out to about two months of supply against a national 4.9. Realcomp data has Oakland homes averaging 23 days on market, the quickest of the three counties, while metro Detroit as a whole moved to 25 days from 21 a year ago.

• •Ask for months of supply in your price band and your city, not the county or the country. The gap between a $300,000 ranch in Royal Oak and a $700,000 colonial in Bloomfield Hills is wider than the gap between Michigan and the national average.
• •Read days on market before you read inventory count. Rising listings with flat days on market means more choice. Rising listings with climbing days on market means actual softening.
• •Separate a price reduction from a price decline. Overpriced listings correcting downward is normal in every cycle. Comparable sales falling is a different event, and Southeast Michigan is not showing it.
• •Watch the sales pace alongside supply. When transaction counts drop, the supply figure can climb in a market where nothing about pricing has changed.

Every cycle produces a statistic that gets repeated far more often than it gets examined. This month it is 4.9. Understand how it was built and it stops being a verdict on your house and becomes what it actually is: a national average your specific block is entitled to ignore. If you want the supply, days on market, and pricing math for your own price band, reach the team at thepatrickgrp.com/contact, or start with a valuation at thepatrickgrp.com/home-valuation.