3.5 months of inventory is tight for Canada. Not for Ottawa.

Ottawa carries 3.5 months of inventory. Canada carries 4.8.

Read those two numbers side by side and Ottawa looks like the tighter market. I made roughly that argument back in July, when CREA's national June release landed and I lined our figures up against the country's. Our inventory was lower. Our price decline was smaller. The conclusion wrote itself.

July's Ottawa numbers are out now, and I want to revisit that post, because the comparison I used was the wrong one.

Stacking Ottawa's months of inventory against Canada's tells you very little. It's the same error as comparing a Kanata commute to a Toronto one and declaring Kanata efficient. Different baselines. What actually matters is how each market sits against its own history, and on that measure the two are pointing in opposite directions.

The number that reframes it

CREA's June national release put the country at 4.8 months of inventory and noted it was sitting slightly below the long-term average for that measure, which is five months. Nationally, supply is normal. A touch better than normal, actually.

Ottawa finished July at 3.5 months. The long-run average for July in this city is 2.4 months.

We are sitting 46% above our own normal. The country is roughly 4% below its own.

That is the entire post and the rest is detail. Ottawa has the lower absolute number and the far worse relative one. If you only look at the absolute, you will misprice your house.

One caveat I want on the record: Ottawa's data is July, the national data is June, because CREA publishes the national package mid-month. The July national release comes out Tuesday. I'll be reading it.

The pile isn't new supply, it's old supply

Here is the arithmetic that made me rewrite my own take.

Sales in Ottawa hit 1,325 in July, up 0.2% from last July. New listings came in at 2,530, down 0.8%. So slightly more homes sold and slightly fewer came to market. Flow was balanced.

Active listings at the end of July: 4,678, up 9.3% year over year, and the highest July reading in a decade.

Those three numbers only reconcile one way. The extra inventory did not arrive in July. It was already there, left over from spring and early summer, and it did not clear. Active listings now sit 29.5% above the five-year July average and 44.5% above the ten-year. New listings are 15.4% above the ten-year average too, so sellers have been steadily feeding the pile all year while the pile itself never drains.

That is a very different problem from a supply flood. A flood passes. A backlog compounds, because every month those homes stay listed they age, and aged listings are what buyers use to justify low offers.

The segments tell you where it's stuck

Ottawa's composite benchmark price was $634,000 in July, down 0.5% year over year. Reasonably flat. Then look inside it.

Single-family homes: $725,000 benchmark, up 0.7%. Townhouses: $542,500, down 5.1%. Apartments: $385,500, down 5.2%.

A market carrying 46% more inventory than normal does not spread that evenly. It concentrates. Detached Ottawa is functioning close to normal on price. Townhouses and condos are absorbing basically the entire adjustment, which lines up with everything I've been writing about the townhouse segment and the condo appraisal gap for the past two weeks.

If you own a detached home in an established Ottawa neighbourhood, the inventory story is mostly happening to other people. If you own a townhouse or a condo, it's happening to you.

Demand is not the issue

I want to be careful not to turn this into a doom post, because the sales data doesn't support one.

1,325 sales is the best July Ottawa has recorded in five years. It's 10.8% above the five-year July average. It's 4.6% below the ten-year average, which tells you we're running slightly under the longer-term norm, not collapsing under it. Year to date we're at 8,288 sales, down 5.2%, and that gap was built in a slow spring rather than a slow summer.

Buyers are transacting at a perfectly ordinary rate. The problem is that sellers listed at an extraordinary one, and the market has been quietly accumulating the difference since March.

What I'd actually do with this

Selling a townhouse or condo this fall: your competition is not the six units listed near you this month. It's the forty that have been sitting since May and are now four months stale and increasingly motivated. Price against the stale inventory, not the fresh inventory, because that's who the buyer is comparing you to. I wrote about why waiting for the fall market doesn't fix this, and a 46%-above-normal inventory reading is exactly why.

Selling a detached home: your position is genuinely better, but resist reading the citywide numbers as your numbers. Pull the benchmark for your own property type and community. That's the discipline I laid out in the piece on average versus benchmark price.

Buying: 3.5 months in Ottawa is the loosest July market you have seen in ten years, and it is concentrated in the two segments where a first-time buyer or a downsizer actually shops. That is leverage. Ask how many days a listing has been on market before you ask anything else, and look at what's sitting rather than what just came up.

Two dates worth marking

Tuesday, August 18: CREA publishes national July numbers. If the country's inventory holds near or below its long-term average while Ottawa runs 46% above ours, the divergence I've described gets one month more durable, and I'll write it up.

Wednesday, September 2: the Bank of Canada's next decision. The policy rate has been at 2.25% and a hold is the widely expected outcome. Nothing in the inventory picture changes if it holds, which is rather the point. This is a supply story, not a rate story, and it will not be solved by a quarter point.

Most of what I do is telling people which of these numbers is theirs and which is somebody else's. If you're weighing a fall move in either direction, call me at 613-262-6545 or email fil@613realtor.ca and we'll pull the inventory reading for your property type and your community instead of the city's.