How to Read a Real Estate Market Report (Plain English)

A market report is a page of numbers that tells a story, if you know how to read it. Median price, days on market, inventory, and months of supply are the four numbers agents quote all the time, but few can explain what they actually mean to a client. This guide translates each one into plain English so you can read any report with confidence.

What is a real estate market report? A market report summarizes recent sales activity in an area: prices, volume, and speed of sales over a period. It answers one question, is this a buyer’s, seller’s, or balanced market?, with four or five numbers that agents explain to clients.

The four numbers that tell the whole story

Number	What it means	What to watch
Median price	The middle sale price, half sold above, half below	Trend over months, not one month
Days on market	How long homes take to sell	Rising days = cooling demand
Active inventory	Homes for sale right now	Fewer = more seller leverage
Months of supply	How long inventory would last at current pace	Below 4–5 = seller’s market

Months of supply: the market’s single best signal

Months of supply divides active inventory by the pace of sales. Three months of supply means the current inventory would sell out in three months at the current rate. Below roughly 4–5 months is a seller’s market (buyers competing); above 6 months leans buyer’s market (sellers competing). It is the fastest single number to gauge the balance of power.

What is months of supply? Months of supply is active listings divided by average monthly sales. It estimates how long the current inventory would last. Under ~4–5 months favors sellers; over ~6 favors buyers. It is the headline indicator of market balance in any report.

Median price vs. average price

The median is the middle sale; the average is the mean. A few very expensive sales can drag the average up and make the market look stronger than it is, which is why most professional reports lead with the median. When you quote a number to a client, quote the median and the trend, and be honest about both.

Days on market and inventory trends

Days on market measures speed. When days rise, buyers have more choices and take longer to decide. Inventory is the other side of the same coin: rising inventory cools competition, falling inventory heats it. Watch both as trends across three months, single months bounce around with seasonality.

Turn a report into a client conversation

Clients do not need a spreadsheet; they need a takeaway. Lead with the one-line story (“prices are up 4% year over year and homes are selling in 21 days”), back it with two or three numbers, and end with what it means for them, now is a good time to list, or buyers should move faster. That is the whole job.

Turn your numbers into a professional narrative

Enter the market figures and the Market Report Narrative writes the client-ready summary for you, clear, confident, and free.

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Frequently asked questions

What is a good months of supply number?

Roughly 4–5 months of supply is considered a balanced market, buyers and sellers have similar leverage. Below that favors sellers (homes sell fast, often over list); above that favors buyers (more choices, more negotiation room). Treat it as a trend, not a single-month verdict.

What does days on market tell a buyer?

Days on market shows how fast homes sell in an area and, per home, how long a specific listing has sat. A home far above the area average often signals it is priced high or has a problem, useful leverage in negotiation, and a reason to ask questions.

Why do reports use median price instead of average?

Because the average is distorted by a few very expensive sales. The median, the middle sale price, represents what a typical home actually sells for. When comparing months, the median also moves more slowly, so it better reflects the true trend.

How often should I share a market report with clients?

Monthly for past and active clients builds authority and keeps you top-of-mind. A short, personal note with one headline number, one trend, and one relevant takeaway outperforms a dense spreadsheet, and takes minutes with the right tool.