The old Ballard cottage was only 700 square feet—the size of many one-bedroom apartments. It lacked both a garage and a basement, but it was freshly painted and move-in ready. The asking price, $360,000, was just below the $379,000 average price logged in King County earlier this spring. It got five offers—and went for $405,000.

“We’re seeing crowded open houses again,” said Mike Skahen, owner and broker at Lake and Co. “Buyers always pay for neighborhoods. And when homes come up on streets with character, it’s amazing how fast they move.”

The story in real estate, for now, is low inventory. Some sellers with flexibility hesitated to list in recent years, worried about exiting at the bottom of the market. In close-in neighborhoods, -Skahen and other agents say owned homes have recovered about 10 percent of their lost value. But with many would-be sellers staying put, hoping to recover the equity they lost in between the 2004 to 2007 boom years and the present, many homes that might normally hit the market simply don’t. Further afield—in more remote areas of Pierce and Snohomish counties—foreclosures linger. In the rental market, vacancies are tightening, too (see the rental trends chart).

What is available now is going quickly. On the for-sale front, there were 13 percent fewer listings in the Puget Sound region in 2011 versus 2010, according to the Northwest Multiple Listing Service; entering the spring 2012 selling season, inventory is down by more than 25 percent. Fewer homes and condos for sale means that the for-sale market is inching back toward balance—it’s neither a buyer’s nor a seller’s market, per se—and homes in many neighborhoods are selling faster than before. With interest rates low, first timers, move-up buyers, and investors are finally closing deals. For those who are looking, regardless of what kind of home search they’re conducting, they’ll face competition, but it’s not impossible to find a place. Just ask folks on the market. We did. And in the following pages, here’s what they’ll tell you about their home searches.

Jane Hodges is the author of Rent vs. Own: A Real Estate 
Reality Check for Navigating Booms, Busts and Bad Advice (Chronicle Books).

The Move-Up Homebuyers

The Born-Again Renter

The Investor

The Rental Virgin

Seattle-Area Rentals By the Numbers

Seattle Neighborhoods and Suburbs By the Numbers