Sales are average -- and on the low side of average -- and markedly slower than the spring. Inventory is creeping higher but slowly. It is still very low because new listings are not significantly higher than average. Months of inventory has continued to creep up through a combination of rising inventory and lower sales. It appears that conditions are not worsening in a significant way.
The market is slower now. As I have mentioned before, a slowdown was all but inevitable to cause prices to stop rising at the rates they have recently. Current conditions could be, but are not necessarily, a very early indication of a more significant price correction in 2017.
Since sales are highest in the spring and inventory tends to climb through the first half of the year, prices in the spring tend to be more robust than the second half of the year. If you are looking for significant downwards price changes, they will most likely manifest in the house price index data no earlier than the fall of 2017, and that will necessarily be predicated by sluggish sales and rising inventory in the first half of the year. We are not to the point where a price drop is a surety, but there are sufficient conditions in place for it to occur.