Sometimes too much of something can become a problem. Certain foods in excess are bad for your health. Too much wet or dry weather can damage crops. And too much of a housing scarcity can upend markets and require reconsideration of how markets are acting.

Black Knight home price housing data shows that single-family house inventories remain at historical lows, at least in the top 100 US metros, and in some are actually trending toward zero. Additionally, days on market have also been hovering at historically low levels, "often just a few days," according to the firm. "The results of this study, based on data from our HomePriceTrends analytics platform, show severe and accelerating chronic shortages in every market, in every price range."

Black Knight uses categories from "hot" to "distressed" as part of a qualitative assessment of markets. Typically, between two-thirds to four-fifths of markets are in one of the three middle categories of "good," "normal," or "soft." Only a tenth of markets are either "distressed" or "hot."