There are a number of methods to measure the health and strength of the real estate market. A statistic that reflects on both supply and demand for homes that is an excellent summary of both of them in most area's is called the absorption rate or the saturation rate.
As an example, below is chart from the Multiple Listing Service (pulled 3-1-23) This particular graph reflects the top 25% of price bracket homes ($575K+) in the SW Metro (All real estate is local!) and their corresponding saturation rates. As you can see, we are effectively looking at a mirror image of where we were a year ago. Limited supply, with consistent buyer demand.