One of the most common questions we hear from buyers, sellers, homeowners, and visitors alike is simple:
“How’s the market?”
While it may seem like a straightforward question, the answer is rarely as simple as “good” or “bad.” Real estate markets are constantly evolving, and understanding what’s really happening requires looking beyond headlines and digging into the data.
At Collins Group Realty, we monitor several key indicators to understand what we call the “mood of the market.” Here are the seven metrics we watch most closely.
1. Monthly Housing Supply
If there is one metric that provides the clearest snapshot of market conditions, it’s housing supply. Monthly housing supply measures how long it would take to sell all available homes if no new listings came on the market. Generally speaking:
- Less than 3 months = Seller’s Market
- 3 to 6 months = Balanced Market
- More than 6 months = Buyer’s Market
This metric helps us understand whether inventory is favoring buyers, sellers, or neither.
2. Days on Market
How quickly are homes selling?
Days on Market (DOM) measures the amount of time properties remain active before going under contract. When homes sell quickly, demand is often strong. When properties remain available for longer periods, buyers may be exercising more patience and selectivity. This metric helps establish realistic expectations for both buyers and sellers.
3. Median Sale Price
Many headlines focus on average sale prices, but we prefer to study median sale prices. Why?
The median eliminates the impact of unusually high or low sales and provides a clearer picture of what’s happening in the middle of the market. This often gives a more accurate representation of overall market trends and buyer behavior.
4. Price Reductions
Price reductions tell an important story. In an extremely competitive market, homes often sell before a price adjustment becomes necessary. As conditions shift, however, sellers may need to adjust pricing to attract buyers. Monitoring the frequency of price reductions helps us gauge seller confidence and understand how the market is responding to current inventory levels.
5. Sale Price to List Price Ratio
Another important indicator is the relationship between what sellers ask and what buyers are willing to pay.
The sale-price-to-list-price ratio helps measure negotiating conditions in the marketplace. During highly competitive periods, homes may sell at or even above asking price. In more balanced conditions, buyers often have greater negotiating power. This metric provides valuable insight into overall market strength.
6. Buyer Feedback & “Word on the Street”
Not every market indicator comes from a spreadsheet.
One of the most valuable tools we have is listening to buyers, sellers, and fellow real estate professionals. What concerns are buyers expressing? How quickly are they making decisions? What feedback are agents hearing during showings? These conversations often reveal changes in market sentiment before they appear in the statistics.
7. The Gap Analysis
One of our favorite tools is something we call the “Gap Analysis.” This measures the relationship between new listings entering the market and properties going under contract.
When new listings significantly outpace pending sales, inventory grows and market conditions may begin favoring buyers. When pending sales keep pace with or exceed new listings, inventory tightens and conditions may shift toward sellers. Watching this gap over time helps us identify where the market may be heading before broader trends become obvious.
Looking at the Complete Picture
No single metric can tell the entire story of the market. The most accurate understanding comes from studying these indicators together and recognizing how they interact. That’s why our team continually monitors market data, buyer behavior, and local trends to help clients make informed decisions.
The next time someone asks, “How’s the market?” you’ll know the answer is about much more than a single number.