By Les Christie, staff writer

NEW YORK (CNNMoney.com) -- Can it be possible? Despite the housing bust and high foreclosure rates, in some areas real estate agents are complaining that they don't have enough homes to sell.

There is currently an eight-month supply of homes on the market -- meaning that, at the current sales pace, it would take eight months to run through the backlog.

That's still a lot compared to the six-month supply that is expected in a normal market, but it is much better than it was. In March, there were nearly 2% fewer homes on the market than there were a year ago, and 21.7% fewer than the record of 4.6 million in July 2008.

In some areas, supplies are even bidding-war tight. In Denver, for example, supply has fallen to 5.7 months from 6.2. In Phoenix it has declined to 4.5 from 5.2; and in San Francisco inventory has halved, to 3.2 months from 6.5 last March.

In California, almost all cities have a short supply of single-family homes. That's especially true in the lower-priced categories, according to Leslie Appleton-Young, chief economist for the California Association of Realtors.

The supply of homes that sell for less than $300,000 is at 3.2 months statewide, down from an already low 3.3 month supply 12 months ago.

Inventory of moderately priced homes, those between $300,000 and 500,000, fell to 4.2 months in March, down from 4.5 months in March 2009.

There are plenty of more expensive homes in California, but this inventory is going quick: inventory for million-dollar-plus homes has dropped from 21.6 months to 10.9 months.

Further north, all over the Pacific Northwest, the supply of moderate and lower priced homes is also tight, according to Lennox Scott, CEO of John L. Scott Real Estate. And not even the end of the homebuyer tax credit is expected to ease demand.

"In lower price ranges, prices will stay fairly stable because we're undersupplied," said Scott.

In the higher price ranges, sales are slower than they would be because of continued problems in obtaining financing. Right now, most jumbo-mortgage lenders require down payments of 30% to 35%, but as that eases, sales of higher end homes should rise and supplies fall.

Ordinarily, rising prices are an indication of shrinking inventory. But these are far from ordinary times. Never have there been so many properties that could be for sale -- but aren't.

This so-called "shadow inventory" comes from two main sources: properties lenders have not yet repossessed or have not yet put back on the market; and homeowners who want to sell but who have refrained because of low prices.

Lenders are also holding back on foreclosing at all, either because they're having trouble handling the volume of repossessions or because they want to sell off some of the inventory they already have.

"Notices of default are filed, but they're not taking the properties back," said Appleton-Young.

Zillow surveys indicate there's a big pool of homeowners who have wanted to sell their homes during the past three years but market conditions either prevented sales or kept them from trying. The company estimates that 8% of homeowners are very likely to try to sell their homes in the next twelve months if they see signs of improvement in their local markets.

"These sidelined sellers closely watch the market for signs of a possible turnaround and rush in if there's a hint of good news," said Stan Humphries, chief economist at Zillow.com.

And so, as prices increase, inventory could also increase. While that's not good news for sellers, it is good news for buyers. They can take their time when shopping for a home without having to worry about getting priced out.