Tom Bailey

USA TODAY NETWORK – Tennessee

"Dear Homeowner,'' starts the letter that Rip Haney mailed late last week to 40 homeowners in an East Memphis neighborhood.

"I'm writing because I'm representing a well qualified and very motivated buyer who would like to purchase a home in your neighborhood. If you would consider selling yours or know of a neighbor who might sell theirs, please call me at your earliest convenience,'' states Haney, a veteran real estate agent with Marx-Bendsdorf Realtors.

His mass mailing is an example of the extra efforts real estate agents are making amid an extraordinarily low stock of houses for sale.

Agents have even resorted to homeowner cold calls, said Tommie Criswell, a Crye-Leike Realtors agent and president of the Memphis Area Realtors Association.

"This has been going on from the beginning of time, but it may be a little more common right now,'' she said. "There is more demand. Agents may be finding it a little more to their benefit to make those cold calls than in 2008 when there were 12,000 properties on the market.''

The Memphis area had 13,227 houses listed for sale in September 2007 before the financial crash. By January 2017, the inventory had dropped to 4,344, the lowest number since 2000, according to the local Realtors association. The amount of "For Sale'' signs rose a bit in February, to about 4,500.

This is the biggest challenge Haney has experienced in finding houses for clients in the 23 years he's been an agent. "I haven't noticed a dearth in inventory like we're having now,'' he said. "Sure enough, we've got to pull out all the stops.''

But sales figures are rising, both the number of units sold and the dollar value of sales, Criswell said.

For February, 1,130 units were sold in the Memphis area, up 5.4 percent from the 1,072 sold in February 2016. In January and February, 2,297 units were sold, up 11.9 percent from the 2,053 sold during the first two months of 2016.

The average sales price rose 6.9 percent, from $138,088 in February 2016 to $147,669 last month.

"We are seeing housing moving quickly,'' she said. "It's not uncommon in today's market for housing priced appropriately and in the right condition to sell within 24 hours and with multiple offers.''

The biggest reason for the dearth of "For Sale'' signs is that new-home construction has still not rebounded from the Great Recession nearly 10 years ago, according to the National Association of Realtors.

With the new supply of housing choked off, more existing-home owners are staying put instead of moving into new homes. And that means fewer existing homes available to first-time home-buyers.

The competition for available homes is especially fierce in Collierville.

"If you've got someone looking for under $300,000 to $400,000 in Collierville, to be honest, especially in that mid-$200,000 range, there's just not much out there,'' said Allen Green, owner/broker of John Green & Co. Realtors.

Like Haney, some of Green's agents have been writing letters to home owners asking if they have any interest in selling. "Whatever they can do to try to get a house to show a buyer,'' Green said. "You have to get creative.''

In 2005, 4,730 construction permits for new homes were issued in Shelby County. "Last year, we had 900 starts,'' said Don Glays, executive director of the West Tennessee Home Builders Association. "Basically, we're off 80 percent'' from before the recession, he said.

About 3,000 new homes a year should be built in the Memphis area "just to maintain a balance'' for the area's population and new residents coming in, Glays said.

"By building 900 a year for the last few years, obviously we are way below that number," Glays said. "We believe there's a huge, pent-up demand for housing in the market.''

Conditions are improving slowly. Based in part on approval of new subdivision plans especially in the suburbs, the home builders group projects up to 1,500 new homes will be built in 2017. "And 2000 or 2,200 in 2018 and beyond,'' Glays said.

"We're getting closer to a real valid building-activity point,'' he said. "But it doesn't happen overnight.''

Until then, the Memphis area will remain a sellers' market. "There are ways (buyers) can help themselves prepare for the market we find ourselves in now," Criswell said.

"Make sure they have got money in place whether in cash or financing. Know exactly how they plan to pay for the house before they go look at the first house,'' she said.

Home searchers also should be confident in the type of house they are looking for and should pinpoint "where they truly want to live,'' Criswell said.

"When they find the house they want they want to have all their ducks in a row so they will be in the strongest negotiating position possible,'' she said.