I have, along with many others, been watching the housing market go on a tear for the past 2 years. Low inventory and low mortgage rates have combined to push housing prices up quickly. As a result I have seen potential buyers just give up looking, having been priced out of the market.
I have 2 clients, one young couple had been looking for a home in a rural area with a top price point of $265,000. When we started looking over a year ago there were some homes available and we made good offers on several, only to be way out bid by other desperate buyers.
The second couple is looking for a home in the $400,000 price range. You would think there would be more available in this price point, but no. The few that come up are quickly bid up in price to an unaffordable price point.
Both these buyers have quit looking. They have been priced out of the market. Hopefully some sanity will return when more inventory is available.