Some markets have fallen below that. Last month, nine of 18 leading markets tracked by real estate brokerage Redfin had less than a three-month supply. That means it would have taken three months to sell all of the listed homes at April's sales pace.
Those markets included the San Francisco Bay Area, Phoenix, Denver and Washington, D.C. A year ago, only Phoenix had such a low inventory, Redfin's data show.
"Multiple offers are definitely the norm," says Rick Turley, president of Coldwell Banker Residential Brokerage for the San Francisco Bay Area. At one point this month, 80% of the properties that his agents were working to buy or sell had multiple offers, Turley says.
Unlike the days during the housing bubble, house shoppers are more likely to go to the sidelines after making three or four offers, he says.
"We're seeing a significant number of people step back from multiple bids," says Glenn Kelman, Redfin CEO. "They say, 'I'm not going to make the mistake people made in 2006.' "
Compared with a year ago, supplies are tighter in every price category in 47 of 50 top U.S. markets, according to real estate website Zillow. Leaner supplies of lower-price homes are especially evident in some markets.
In Phoenix, San Francisco and Las Vegas, the number of lower-price homes for sale has dropped 64%, 53% and 50%, respectively, in the past year, Zillow's analysis found. That's a bigger drop than what's occurred for higher-price homes in those markets, Zillow's data show.
Tight inventories will push up prices, encouraging more people to list homes, Zillow economist Stan Humphries says.
Plenty are waiting. "Every Realtor knows divorced couples living in the same house because they're waiting for higher prices," says Remax Realtor Kathie Shandro in Denver.
Many people lack enough home equity to buy again, CoreLogic economist Mark Fleming says. CoreLogic says 45% of mortgage holders have less than 20% home equity.
Fewer foreclosed homes are also coming to market, Fleming says. Plus, lower-priced homes are attractive to investors, who're turning them into rentals, Fleming says