Supplies are down across the nation, not just in the former crash markets, like Phoenix and Las Vegas, where investors decimated inventories of distressed homes in bulk purchases. Listings are down 31 percent in Seattle from a year ago, down 32 percent in Denver, down 20 percent in Houston, down 37 percent in Boston, according to local Realtor associations.

(Click Here: Recover Watch Map, Complete Coverage)

“At the moment it’s a seller’s market again,” said David Fogg, a real estate agent in Burbank, CA. “Very low inventory, very low interest rates, almost no bank inventory of homes, it’s crazy out there. Every good property I’ve listed this year has brought 10-50 offers and sales prices 10-20 percent over comps. Cash is King.”

Nearly one third of all existing home sales in January were paid for in cash, and not just by investors, who are making up a shrinking share of the market. Fierce competition is forcing buyers to use every advantage, given that so many are going after so little.

In California’s San Fernando Valley there are usually over 9,000 homes for sale this time of year, according to real estate agent Billy Wynn. Today there are just over 1,400.

“Realtors are getting so many offers they are taking the homes off the market and not accepting additional offers before any offer is even accepted,” said Wynn. “This is real estate bubble 2.0 on steroids.”

It is a puzzling situation, given all the warnings of a tsunami of so-called “shadow inventory” that was supposed to be flooding the market right now. As it stands, fewer distressed properties are coming to the market.

“The ticking time bomb of shadow supply has been diffused by a combination of foreclosure processing delays in judicial states, legislation slowing down the foreclosure process in non-judicial states, foreclosure prevention programs and initiatives encouraging short sales,” said Daren Blomquist of RealtyTrac. “Notably, in 2012, was the National Mortgage Settlement, which both encouraged foreclosure prevention and short sales as an alternative to foreclosure, and the loosening of short sale guidelines by Fannie Mae and Freddie Mac in November.”

As a result, short sales, where the home is sold for less than the value of the mortgage, are rising as a share of total distressed sales, while bank-owned home sales are falling. Investors are now competing for such little supply that they are ironically pricing themselves out of the market.

(Read More: Distressed Homes Still Drive Sales)

“We are hearing also, that new home buyers are not really looking at the foreclosure market—the houses are either not in good neighborhoods or the house is in bad condition and needs a lot of updates,” noted Paul Miller, an analyst at FBR. “So home buyers are either going to new-builds or being very picky with the type and shape of the house. We are hearing from plenty of mortgage brokers that they are working with many couples, and they just can’t find the perfect house.”

Article source: http://www.cnbc.com/id/100512238

(Read More: Beware the Escape Hatch in the New Mortgage Rules)

“Many homeowners may simply be deciding to play the market and wait for their home to appreciate before putting it up for sale. Despite the drop in applications, we have seen anecdotal evidence of homes selling very quickly after entering the market,” says Bob Walters, chief economist at Quicken Loans.

Days on market are shrinking across the nation, but only because supplies are so low. It’s not just the former boom to bust to boom markets, like Phoenix and Las Vegas; local Realtor associations show inventories are down dramatically from a year ago in Charlotte (-29 percent), Dallas (-19 percent), Minneapolis (-32 percent), and Washington, DC (-36 percent) to name a few.

“The low and negative equity of a large number of mortgage holders has kept significant inventory off the market, and many would-be sellers with adequate equity feed into the problem by holding off until they find something to buy,” says Jonathan Miller of CEO of Miller Samuel Inc. “I believe the chronic low inventory phenomenon we are seeing has little to do with lack of consumer confidence and more to do with reasonable access to mortgage financing.”

President Obama echoed that sentiment in his State of the Union addressTuesday night.

“Overlapping regulations keep responsible young families from buying their first home,” Mr. Obama said. Not exactly a new sentiment, as the Chairman of the Federal Reserve, Ben Bernanke, has said the same thing several times, as have other federal regulators.

(Read More: Fewer Behind on Mortgages, but for How Long?)

Rising mortgage rates and tight credit standards keep first time-home buyers out, while falling inventories make it more difficult for existing home buyers to move up. The housing market is therefore still largely in the hands of all-cash investors, looking for distressed properties to buy and then rent out. Ironically, perhaps for now, more distressed properties coming to market will be what keeps home sales afloat.

Article source: http://www.cnbc.com/id/100456918

(Read More: Beware the Escape Hatch in the New Mortgage Rules)

“Many homeowners may simply be deciding to play the market and wait for their home to appreciate before putting it up for sale. Despite the drop in applications, we have seen anecdotal evidence of homes selling very quickly after entering the market,” says Bob Walters, chief economist at Quicken.

Days on market are shrinking across the nation, but only because supplies are so low. It’s not just the former boom to bust to boom markets, like Phoenix and Las Vegas; local Realtor associations show inventories are down dramatically from a year ago in Charlotte (-29 percent), Dallas (-19 percent), Minneapolis (-32 percent), and Washington, DC (-36 percent) to name a few.

“The low and negative equity of a large number of mortgage holders has kept significant inventory off the market, and many would-be sellers with adequate equity feed into the problem by holding off until they find something to buy,” says Jonathan Miller of CEO of Miller Samuel Inc. “I believe the chronic low inventory phenomenon we are seeing has little to do with lack of consumer confidence and more to do with reasonable access to mortgage financing.”

President Obama echoed that sentiment in his State of the Union addressTuesday night.

“Overlapping regulations keep responsible young families from buying their first home,” Mr. Obama said. Not exactly a new sentiment, as the Chairman of the Federal Reserve, Ben Bernanke, has said the same thing several times, as have other federal regulators.

(Read More: Fewer Behind on Mortgages, but for How Long?)

Rising mortgage rates and tight credit standards keep first time-home buyers out, while falling inventories make it more difficult for existing home buyers to move up. The housing market is therefore still largely in the hands of all-cash investors, looking for distressed properties to buy and then rent out. Ironically, perhaps for now, more distressed properties coming to market will be what keeps home sales afloat.

Article source: http://www.cnbc.com/id/100456918