I think the only reason there is an inventory shortage is because a lot of people who got their head ripped off the last time realize it's a bad idea to sell your current home and try and upgrade what you have when values are so overblown. Even selling, pocketing the profit, but then being faced with paying overvalued rent is hard to make sense of right now.
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You are correct.
The inventory shortage is in the market under 500,000 as near as I can tell!