It is not just homes for sale that are scarce. Judging by active rental listings on ARMLS, homes to rent are just as hard to find.
You would expect such a shortage of supply in the face of strong demand to result in a healthy increase in rents (or unhealthy if you a prospective tenant). You would be correct, as the average rental rate per square foot for leases closed so far in September is $1.15. This is up 15% from the same time last year, the fastest rate of rent increases that we have ever recorded. Note that this does not mean that the average rent in the real world went up by 15%, it means the average lease closed through the MLS increased by 15%. The MLS tends to have a higher concentration of high-cost rental homes which take longer to market.
The fast rate of increase in rents is a very important reason why 2020 is so very different from the bubble year of 2005. Rents did not increase at all between 2000 and 2005, in fact they went down on a rent per square foot basis, reaching a low point of 65 cents just as the purchase market reached its most extreme Cromford® Market Index. When home prices go up very fast but rents go down, this is a very strong signal that you in a real estate bubble. Houses are being purchased that no-one wants to live in, merely for speculation. This was rampant in 2004 and 2005, a sign of a very unhealthy situation which would end in disaster. Few people paid attention in those years, but they did when the damage spread to Wall Street in 2008.
The situation in 2020 is the opposite. We have too few homes for the people who wish to live in them, whether they wish to rent or purchase. We also have people who remember the housing crash and are far too fearful that it will happen again, even though this is most unlikely in the present circumstances. People still need homes to live in and the pandemic would need to have a much higher mortality rate for it to impact the overall demand for homes. A damaged economy does not imply a damaged housing market. However the housing market is so large that a severely damaged housing market can bring down the whole economy, as it did between 2005 and 2009.
We are not currently in a housing bubble even though prices are accelerating. People who think we are experiencing bubble conditions and that prices will shortly start falling have misinterpreted the situation.