Although some believe bargain basement prices for distressed properties may be ending, a large inventory still exists.

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They first took stock of the inventory of the few hundred common properties that they owned.

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Despite the first monthly increase in home prices in 7 months, as the Case-Shiller indexes showed on Tuesday, there are still more than 10 million properties with underwater mortgages, and a shadow inventory of 1.5 million, or four months supply.

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Each month, he and colleagues survey 4, 000 real estate agents across the U.S. The topics: what kind of foot traffic those agents see, the price movement of listed properties, incentives offered by home builders, overall inventory of homes on the market and the amount of time needed to close deals.

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"Rising home prices may begin to alleviate a lack of housing inventory ... by encouraging more homeowners to put their properties on the market, " said Maninder Sibia, an economist with Economic Advisory Service, in a note to clients.

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The relatively low inventory and high demand means unsolicited rental offers on for-sale properties have become commonplace.

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The inventory is likely to rise in coming months, as more homeowners list their properties in time for the spring selling season.

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Regulation (such as the robo-signing sparked foreclosure moratorium) has helped to slow distressed sales, while vast number of underwater mortgages and size of the shadow inventory suggests housing markets can face a sudden increase in the number of distressed properties.

FORBES: What Housing Recovery? Distressed Sales Still High, Shadow Inventory Massive