Is The Real Estate Market Rebounding?

We measure inventory in terms of "months of supply". Example: If there are 100 units available and an average of 10 units are sold each month (for the last year), that's 100/10=10 month supply. For those of us in the industry, a 6 month supply of homes (or condos) is considered a balanced market. Less than a 6 month supply is a seller's market, longer than 6 months is a buyer's market. Of course, that's a very general guideline, but it works most of the time.

Here's some information that was discussed at my company's sales meeting yesterday. From calendar year 2009 to calendar year 2010, the inventory of detached single family residences (SFR) in Livingston County (MI) dropped by 17.5%, from 8.0 to 6.6 months of supply. Likewise, the condo supply dropped from 7.9 to 5.8, or by 26.5%.

In Oakland County, the SFR went from 7.0 to 5.8, or a 17.1% drop while condos went from a 9.4 month supply to 5.6 months - a whopping 40.4% drop in inventory!

Washtenaw also saw drops, although more modest. For SFRs it was from 7.4 in 2009 to 6.9 in 2010, a 6.6% reduction. Condos went from 9.1 to 6.1 months supply, or a 24.2% reduction.
Now we know that 2010 was still a big year for foreclosures and that not as many foreclosures came on the market for resale. Banks seem to be hanging on to some of the inventory, keeping them off the market. But I don't think that accounts for all of these figures.

We have historically low interest rates (although they are creeping back up), low purchase prices, lower inventory, and judging by our collective calls and inquiries there is strong buyer demand.

My personal experience is that when a property gets to the 'right' price it will create a multiple offer situation. I've recently been in situations where one of my listings had 6 competing offers, another 4. As a buyer's agent, I've been there, too. My feeling is that the housing market is starting to rebound, although we're certainly not in the clear yet. 'Rebound' is in terms of the number of sales, not sales prices, which remain pretty low. What do you think about the real estate market or the economy in general?