Editor's note: This is the first of a two-part series on the impact of shrinking inventories on buyers and sellers. In Part 1, Inman News reporter Andrea V. Brambila looks at how the scarcity of of listings in many markets is affecting buyers. Part 2 will look at impacts on sellers.
Homebuyers nationwide are discovering their self-appointed task is not for the faint of heart. Nearly every major market has seen double-digit declines in inventories of for-sale listings, making multiple-bid situations common.
According to Realtor.com, which receives listings data from nearly all of the nation's multiple listing services, there were fewer homes for sale in August than at the same time a year ago in all but two of 146 metro areas tracked.
Inman News asked real estate agents and brokers in markets with shrinking inventories how they're coping, and found that many are dealing with at least one consequence of the shortage: thwarted buyers.
"The buyers tend to become a little frustrated as they are seeing homes that they want to 'think about' and before they can even get home to discuss it there are already multiple offers on the property," said Sheri Moritz, a real estate broker with Keller Williams' Wake Home Team in Raleigh, N.C.
According to statistics compiled by Realtor.com, the Raleigh area saw a 21 percent annual drop in listings in August.
"I counsel buyers to be patient, and not get discouraged, that it may take extra time to find the suitable property," said Tom Avent, a broker associate with Guaranteed Real Estate in Fresno. "I have also seen some buyers give up looking, frustrated with low inventory and losing out in multiple-offer bidding."
Realtor.com statistics show the Fresno metro area experienced the third-largest drop in listing inventory nationwide in the past year, down 43.1 percent in August. Active inventory currently stands at a 1.5 months' supply -- far less than the six-month supply many analysts see as a balance of demand from buyers and sellers.
A recent survey of buyers by brokerage Redfin found inventory shortages and bidding wars dampening buyer enthusiasm during the third quarter. Less than half of survey respondents said now was a good time to buy, while there was an increase in those who said now was a good time to sell -- an indication that would-be buyers think the market may be shifting against them, Redfin said.
The survey also found a reluctance to engage in multiple-offer situations: seven in 10 of those surveyed said they'd encountered competition on at least one offer, and 31 percent said they'd back off when faced with multiple-offer situations, up from 28 percent during the second quarter.
One of Avent's clients, homebuyer Nicki Sullivan, 57, a human resources professional in Fresno, sold her 1,700-square-foot house recently in order to downsize to a lower-maintenance home.
She got a $211,000 cash offer the first weekend the home listed, which surprised her, and she began looking for a replacement home. She quickly turned to the new-home market after not finding any resale homes to her liking.
"I bought a move-in-ready home with a very short escrow. It is very easy, no multiple bids. The lender was on site that day and I got all my paperwork done in one weekend," Sullivan said. She considered the price, $205,000, "very comparable" to existing homes.
While only the lowest-priced properties used to generate bidding wars, now homes in nearly all price ranges attract multiple offers, according to several real estate pros.
"We're seeing multiple offers for well-priced properties all the way through $500,000," said Charles Roberts, a director at the Denver Board of Realtors and co-owner of Your Castle Real Estate. "Two or three years ago, the recovery was happening at the lower end, below $200,000 and most strong at the very low end."
In the past nine months, the higher end of the market "has seen a very strong recovery," Roberts said. "At one time there were seven years of inventory of $1 million-plus homes. That's down to 10 months or so."
Homebuyer Cori Ward, 35, a financial and administrative services manager in Salt Lake City, decided to dive back into the housing market after selling her home four years ago to travel abroad.
"Prices seem good and the interest rates are low. I have excellent credit, so now that I'm back in Salt Lake City long term, it just doesn't make sense to rent," Ward said.
Read the rest of this story at Inman News.
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