Statewide, the MLS inventory of homes for sale hit a 16-year low in late December, according to Anthony Lamacchia, broker/owner of Lamacchia Realty. He said that at just over 14,000, inventory is less than one-third of the almost 45,000 homes on the market during the same week in 2007.

“And it’s going to get worse for buyers,” Lamacchia said. “For sellers, it’s great.”

Of all the factors that influence the real estate market, none is more powerful than the balance of supply and demand. Although supply is way down across the state, its impact on different markets varies.

Inventory Will Bounce Back

Stephen McKenna is a senior sales associate at Bowes Real Estate in Arlington where he has worked for decades. He thinks inventory will continue to be low for another 18 months before it improves, but he’s not worried.

“There are 11 single-family homes for sale in Arlington right now,” McKenna said in a telephone interview. “The most we had on any one day this year was 36. Historically it’s been in the 90s. In 2017, we might hit 50-55 homes.”

McKenna said his market, Arlington and surrounding communities, is a great place to live and commute from if you work at a university, hospital, in biotech, law or finance. Those cities and towns are safe, generally have good schools, and offer a tolerable commute to Boston and Cambridge.

“Unless you think you’ll see Harvard University or Mass. General Hospital going out of business,” McKenna said, “we’re pretty well insulated.”

McKenna said many people in his area have been renovating their homes to modernize them, but not necessarily enlarge them. As their families continue to grow over time, they’ll eventually sell their home and buy something with a little more space and that will be the catalyst the market needs.

“You need to Baby Boomers to downsize and capitalize on the value in their homes so the people who are now in the condos and starter homes to move up,” McKenna said. “Then first-time buyers can move in. Rents are getting so expensive today, it’s almost cheaper to buy and they know that.”

The New Normal

Charles Cherney of Compass Real Estate has a different take. He said low inventory is now “situation normal.” He said 2016 was the best of his 17 years selling real estate in the Cambridge/Somerville area. Low inventory simply means working even harder for business.

“It’s been low since mid-2012,” Cherney said. “You adjust, adapt. Over time you develop a sphere of influence and develop new business from old business. You also need broad exposure online, where most people start their search so new relationships can be born there. Of course, once you find a new buyer, you still have to win the bidding war.”

Cherney said he sees the lack of inventory driving prices in his already sky-high market even higher. Between 2005 and 2012 Cherney said prices appreciated modestly and that’s the kind of balance he’d like to see return to the market. Today, he said, it’s common for older couples who sell a large home in a western suburb to come to Cambridge as cash buyers and outbid a younger couple for a two-bedroom condo for $750,000.

“The track meet started in 2012 and continues through today,” Cherney said.” I do feel it’s likely we’re soon going to enter into another period of market stability. Sellers don’t mind that the market has run away but if we return to a stable market, that will be something many people will be happy about.”

The Inventory Is There, But Not Priced To Sell

On the North Shore, Kathryn O’Brien, of RE/MAX Partners in Andover said in six of the communities she works the most in − Ipswich, Newburyport, Rowley, Groveland, Rowley and Newbury − inventory is balanced and normal.

“In those towns there are currently 125 single-family homes on the market,” O’Brien said. “That’s pretty good. And there are currently 88 homes under agreement. It shows demand is being met.”

O’Brien said when the market stalls on the North Shore, it’s not for lack of inventory, but because homes come on the market that are priced too high or not in good condition, but as everywhere, if a home is in good condition and priced appropriately, it sells quickly. She said inventory may seem low, but it’s being absorbed as quickly as it comes on.

Inventory Varies By Price

Brigitte Senkler of Coldwell Banker in Concord said the inventory varies by pricepoint in her market. Homes in good condition priced below $1 million sell very quickly. Homes priced over $1.5 million take longer to sell. There are plenty of homes for sale over $2 million because there are relatively few buyers who can afford those properties.

“The inventory is low in the modestly-priced homes,” Senkler said. “Also, very few homes are on the market in the center of town. When they come on and they’re in good condition and are priced correctly, they disappear quickly.”

McKenna said buyers in his market also place a premium on being able to walk to shops and other amenities.

“I call those buyers European Urbanites,” McKenna said. “They want a more walkable lifestyle. They also want good quality space, but not McMansions. They’re buying smaller homes.”

Senkler said the stock market’s recent gains have helped gird consumer confidence. She said she’s curious to see what happens when interest rates go up, as they’re expected to in 2017.

“Now the question will be: will homeowners be willing to give up their lower interest rate they got when they bought or refinanced in the last year or two for a higher interest rate to move up?” Senkler said. “It will take a while for people to do that. Most buyers are still stretching themselves to their financial limit. It’s human nature. You see it in all price ranges.”