The market conditions are, simply stated, a very strong sellers market. There is a historic low inventory and steady sales keeping the absorption rate for condos and single-family homes just over one month.
The absorption rate is derived by taking the number of active listings and dividing them by the number of sales last month. The indicator says that if the sales continue at the same rate as last month how long, in months, will the current inventory last.
A sellers market is any number below three. A buyers market is any number above five. In between three, four and five months supply is a balanced market.
When it is a seller's market the advantage is to the sellers. They can get what they want in negotiation because the buyer is under pressure to give to get. In a buyer's market the converse is true, the seller gives ground in negotiation to get the property sold or the buyer goes to a different property.
Seller's markets pressure prices up and buyer's markets pressure prices down. This is supply and demand market forces at work.