The high demand and the tight inventory are the two primary factors holding the real estate market back. The good news is that the inventory shortage may have peaked, and due to rising interest rates, it will probably improve in 2018.

I recently interviewed Leslie Appleton-Young, the vice president and chief economist for the California Association of Realtors, and Steve Cook, the founder and publisher of Real Estate Economy Watch. Both are optimistic that the worst of the inventory drought is behind us.