A healthy market typically has about 3 months worth of properties available on the market in any given month. San Francisco in November of 2012 had just 1.4 months worth of active housing units up for sale. This is causing a spike in pricing as there are less properties available and more buyers looking to purchase who now enter into bidding wars. Just this past week I saw 17 disclosures go out on one property and 16 disclosure packets go out on another. Also one of the houses 162 22nd Ave in the Lake District went $122,000 over asking price in January and sold for $1.31M.
If you are a buyer, be prepared to pay above asking if you want to get a good property in a nice neighborhood.