The Average Price is the sum of all prices in the market divided by the number of homes in the market. For example, let's say there are 5 homes for sale in a market at prices of $175,000, $200,000, $250,000, $350,000, and $600,000. The average price would be $315,000.
Note that this is not the same as Median Price.
When selling or buying a home, the most useful information associated with Average Listing Price is the trend displayed in the graph. If the graph shows a downward trend, it means that sellers are dropping their prices in response to a softening market. A "soft" market is also referred to as a "cold" or "buyers" market. If Average Listing Price is trending down, it may take longer to sell a home and buyers may have more bargaining power. If Average Listing Price is trending up, the market may be "hot" and homes will likely be selling more quickly. Sellers will have the advantage when prices are going up.