Sacramento, Calif., real estate agents are experiencing 2006 déjà vu.

Once again they are juggling multiple offers on homes that end up selling for more than the asking price.

“The good news is price, affordability, the interest rate, everything is perfect for somebody to buy,” says Chris Little, president of the Sacramento Association of Realtors. 

The bad news?  “We just don’t have the product to sell,” he adds.

There were 1,273 homes for sale in Sacramento at the end of December, a historic low as far as anybody can remember. That’s a 0.8 month’s supply at the current rate of sales and it’s 57% fewer homes than were listed in December 2011.

Remember this is a market that crashed and burned in 2007, leaving 8,965 homes on the market, a year’s worth.

“It’s a real challenge for us,” Little says. “We are seeing multiple offers and we are seeing things going for above asking, the problem is that sometimes the appraisers won’t appraise at that."

Still, appraisers are beginning to come around as they see more and more price appreciations in sales contracts. “Fewer are checking the 'declining market' box,” Little notes.

Another cautionary word on the market is that a lot of the buyers aren’t the people planning to live in the homes but rather they're investors, Little says. Investors "are going after everything fast and furiously and now they are still competing with each other,” he adds. Those bidding wars are hurting the chances of first-time buyers who can’t pay as much.

“I have mixed emotions when I look at it,” Little says. “It’s good to see things finally selling, clearing out the bulk of inventory that we have had for some time. Still, it’s disappointing when you see people renting because they don’t have the funds to compete with the investor buyers."

The shortage of homes for sale is beginning to spark more new home construction, according to Little. “It’s picking up. There are pockets of infill in areas where they have had lots sitting. They are starting to build them out and finish up projects that have sat vacant for a long time.”

While the new market presents obstacles to Realtors, Little wouldn’t trade today’s troubles for yesterday’s. “I think we live in pretty exciting times. I really think that we are definitely headed in the right direction.”