From our resident expert, Rick Turley:

A red-hot, full-blown seller's market has engulfed Bay Area real estate. Buyers are fighting each other to land the winning bid on homes from Novato to San Jose, Burlingame to Pleasanton. Six-figure properties are being bid up into the seven-figures. In all my years of real estate, I've rarely seen a situation quite like this. The only thing missing from this wild seller's market is...well...sellers!

There's a dramatic shortage of homes for sale all around the Bay. This mirrors a national trend, which has seen inventory drop from a 12-month supply at the low-point of the recession to a 4.6-month supply today, according to the National Association of Realtors. But the lack of available inventory may be even more acute here in the Bay Area.

Homes for sale in the Bay Area markets we serve were down sharply last year, and so far this year things have only gotten worse (or better for sellers). Inventory stands at just over a third of where it was two years ago at this time! 

Needless to say, the law of supply and demand is having a huge impact on home prices. The overall median sale price in the Bay Area finished last year up nearly 24 percent from the previous December, according to a recent report by DataQuick, the La Jolla research firm.