“You had a lot of credit damage during the downturn,” Norris continued, referring to the potential boomerang buyers. “That's another whole group of people who are waiting in the wings ... it's a foregone conclusion that they will want to buy again, it's just a matter of waiting until the date when they can buy again.”

Matthew Gardner, chief economist for Windermere Real Estate in the Seattle market, expects a similar trend to emerge there in the coming years.

“Many renters of single family homes are families who lost their homes to foreclosure and we are fast approaching the time when they will be able to qualify for a mortgage again,” he said. “This will, to a degree, limit demand for single family rentals.”

As those boomerang buyers and millennials come out of the woodwork, investors need to be prepared to offer them the types of properties they can afford and qualify for, according to Norris, who said that target inventory in the Inland Empire of Southern California is the 1,500 square foot home priced between $200,000 and $400,000.

“What's the most likely buyer in a certain area, and you kind of dictate your buying habits toward that,” said Norris, noting that there is also more competition for that lower-priced inventory thanks to demand from hedge fund investors buying homes as rentals.

Norris cautioned that even though the apparent “bargains” in his market appear to be on the “bigger box” homes in the higher price ranges, those properties don't represent safe investments because of the limited pool of buyers.

Gardner noted a similar dearth of available lower-priced inventory in Seattle.

“The number of lower-priced homes in the Seattle area is limited,” he said. “For example, in the Seattle-Tacoma-Everett region, just 16% of all active listings are priced below $225,000.

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