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Sacramento, Calif. - After six years of waiting on the sidelines, newly eager homebuyers across the country are discovering that there are not enough houses for sale to accommodate the recent flush of demand.
"In my 27 years I've never seen inventories this low," said Kurt K. Colgan, a broker with Lyon Real Estate here in the Sacramento metropolitan area, where the share of homes on the market has plummeted by one of the largest amounts in the nation. "I've also never seen a market turn so quickly."
The housing turnaround seems to have caught almost everyone in the business by surprise. As desirable as the long-awaited improvement may be, the unusually low level of homes for sale is creating widespread problems for buyers and sellers alike, leading to bidding wars and bubblelike price jumps in places that not long ago were suffering from major declines. In the Sacramento area, where the housing bust took an especially heavy toll, the median list price has surged 35 percent over the last year, according to Zillow.
Nationwide, prices rose 7.3 percent over the course of 2012, according to the Standard & Poor's Case-Shiller index, ranging from a slight decline in New York to a surge of 23 percent in Phoenix. Tracking more closely with the national trend were cities like Dallas, up 6.5 percent; Tampa, Fla., which rose 7.2 percent; and Denver, which gained 8.5 percent. In many areas, builders are scrambling to ramp up production but face delays because of the difficulty of finding construction workers and in obtaining permits from suddenly overwhelmed local authorities. At the same time, homeowners - many of them lifted above water for the first time in years - often remain reluctant to sell, either because they want to wait and see how much further prices will climb or because they are afraid of being displaced in the sudden buying frenzy.
"You see a home go for sale and within a couple days there are three, four, six offers," said Carrie Miskawi, a mother of three young children who has been looking for a new home for the last six months with Colgan's help. She and her husband have decided not to put their current home on the market because they fear it will be snatched up before they have a chance to successfully bid on a new one.
"It's kind of a Catch-22," Colgan said. As long as large numbers of people are hesitant to put their own homes on the market because so few other homes are available, he said, there won't be many homes available.
Across the country, the raw number of homes for sale is at its lowest level since 1999, according to the National Association of Realtors. In the Sacramento metro area, home listings were down 60 percent in January from a year earlier, compared with 23 percent for the country overall, according to Zillow.
Some real estate agents here, like Tom Phillips, have resorted to knocking on doors in desirable neighborhoods to see if the owners might, if asked nicely and promised a healthy gain, sell to one of his clients. One couple he represents, Darcey and Jason Schmelzer, just moved into a yearlong rental with their two boys because they sold before they could find a new place. They received four offers on the first day they put their home on the market, with the winning bid about $10,000 above asking price.
For the builders who survived the collapse, the tight market is a signal to get back to work.
Monthly permits for single-family homes in the Sacramento area more than doubled from January 2012 to January 2013, though are still only a quarter of the level they reached during the bubble. Nationally, the construction industry added 48,000 jobs in February, the biggest increase since 2007.
The housing upturn looks set to continue, finally adding a crucial element of support to the slowly improving economy. The government reported Tuesday that housing permits, while far below their peak, surged in February to their highest level since June 2008, an increase of nearly 34 percent from a year earlier. But it will still be many months before new homes now going through the approval process will be ready to move in.
The New Home Co. has ramped up building as fast as it can, said Kevin S. Carson, the president of the company's Northern California division. Founded in 2009 by the veterans of a major home builder that filed for bankruptcy during the crisis, the company plans to build 120 homes in Northern California this year, in contrast to 50 homes last year.
Construction is expected to take longer than usual, though, and expenses are rising, Carson said. That is primarily because after six years of almost no local building, skilled labor is scarce.