Houses in Georgetown, where I live in Washington, DC, are selling almost overnight and most are selling for full asking price or more. So why would my friend, Eileen, who's a real estate agent in Georgetown, think about spending the rest of the winter in Florida. ( Hint: it's not just the weather.) It's simple, she says: there are almost no homes for sale in the market.

That sounds like a problem with supply, a conclusion supported on a larger scale by the fact that the number of new, unsold homes in inventory (about 100,000) is at or near an all-time low.

Turns out, however, that demand also contributes to the current quasi-stalemate in the housing market. From the end of World War II until very recently an average of about 1 in 6 Americans moved every year. Over the last 2 years the so-called migration rate has declined to about 1 in 9, and staying put depresses demand for housing. Economists say the decline in the migration rate stems from several factors, including the aging of the population (older people move less often), the relatively weak economic recovery (fewer people moving for new jobs) and the fact that an unusually large number of homeowners are still underwater and not willing to take a loss on one home to buy another.

With demand depressed, it's not surprising then that the supply of unsold homes, new and old, is so low. On one hand that's a little discouraging. On the other, I think it's encouraging that builders, for the most part, have remained cautious, waiting for supply and demand to come into a healthier equilibrium.

Learn more about markets featured in this article: Washington, DC.