After putting their home in Portland, Ore. on the market last month, my friends Rutherford and Liane received 15 offers in less than a week and sold it for $66,000 more than their asking price. If you're curious about what a sellers' market looks like, this is it.

An anemic supply of existing homes for sale
To be clear, the overwhelming interest in Rutherford and Liane's house has less to do with any peculiar traits about the property itself -- though, it is a wonderful, well-kept home in a popular price bracket -- than it does with the current dynamics of the housing market. In many metropolitan areas across the country, the number of listed homes is far exceeded by the number of prospective buyers.

You can see this by looking at the National Association of Realtors' measure of available inventory. At the present sales rate, the inventory of previously owned homes for sale equates to just five months' worth of transactions. This is less than the six-month threshold that is assumed to dictate the direction of home prices -- a reading below six months typically leads to higher prices, while a reading above six months is generally associated with falling prices.

The relationship between supply and demand, and the impact these forces have on prices, isn't controversial. Instead, the more trenchant question is: What's behind the anemic supply? This is particularly puzzling when you consider that home prices have climbed consistently in most major metropolitan areas since the nadir of the financial crisis, making home sales much more attractive for owners.

The role of interstate migration
One reason buyers outnumber sellers in Portland specifically is because more people are moving to the city than are leaving it. According to United Van Lines' latest migration study, Oregon was the No. 1 destination for people who moved across state lines last year (thank you to my own real estate broker, Suzanne Godynn, for pointing this out to me). And while I don't mean to disparage eastern Oregon, it's safe to assume that Portland and its surrounding environs were the main draw.

Oregon was the destination point for 2,738 United Van Lines shipments in 2014 and the departure point for only 1,383. This means that 66.4% of all Oregon-related shipments were incoming as opposed to outgoing. That was the highest proportion of incoming shipments of any state.

The influence of underwater homeowners
But even more important than migration patterns, as the net number of emigrants seems hardly enough to distort the entire metropolitan area's housing market, are the number of homes that remain underwater.

Zillow estimates that the negative equity rate across the country was 16.9% in the third quarter of 2014. For Portland, it was 11.2%. On top of this, while CoreLogic says the national negative equity rate was only 10.3% in the third quarter, it estimates that an additional 19% of mortgaged residential properties in the United States were under-equitied, meaning the owners have less than 20% equity in their homes.

The net result is that a non-negligible portion of homeowners would realize a loss if they sold their homes right now. My neighbors are a case in point. They purchased their home at the height of the housing bubble in April of 2007. And while prices have since rebounded from their post-crisis trough, they're still nearly 6% below their 2007 apex. This will improve as home prices continue rising, but it seems reasonable to assume that the problems with supply won't be alleviated entirely until prices meet or exceed their pre-crisis high.

"Looking at negative equity helps us understand so many of the currently out-of-whack dynamics in the housing market, including low inventory, rapid home value appreciation, and weak sales volumes," says Zillow Chief Economist Stan Humphries. "None of these problems will be solved overnight, in large part because negative equity will likely be a part of the housing market for years, and easily into the next decade in some hard-hit areas. But we're moving in the right direction, and time will heal all wounds. "

The point here is that we're in the midst of a textbook sellers' market. For home sellers like Rutherford and Liane, this is great news because it means higher prices and more competition for listings. For homebuyers, it means just the opposite. Thus, if you're in a position to take advantage of these trends, now is a good time to do so.