Here is the Monroe Washington Market Update for February 2013.
Inventory level are still extremely low. They have dropped more than half in the last year. Why? Three main reasons:
First, is that the bank owned inventory is down. Partially due to banks improving their processes of the foreclosure procedures. The "Robo-Signing" scandal caused many banks to stop pending foreclosure to be sure their paperwork was done properly. Banks have also improved alternatives to foreclosure such as loan modifications and short sales.
Second, most home owners are still upside down in the equity column. Although many folks are employed and making their existing mortgages on time, they owe more on the home than it is worth.
Third, is the overall uncertainty with the economy. Taxes are changing. Healthcare costs are changing. People are looking for evidence that the economy is improving before they feel comfortable increasing their housing cost.