My city has a shortage of quality rental homes and demand is high. 

Anchorage has a housing shortage for some target markets.

The reason a lot of investor never get started is they are in a market that demands cash, or an extreme amount of patience and luck to get into a deal with little or no cash.. whereas if your say in MI or OH or any of the big cities in the mid west if you wish you can get started with 5k or 10k and own and asset and gain experience .. you may not get rich or you may lose your money )( fairly certain many do) but you will get a transaction under your belt and can start to move up the food chain.If you living in one of the very high priced markets your 1. competing against some pretty big money and smart tough players.. 2. there is a shortage of properties not a plethora of vacant boarded up homes like all of the mid west upper east coast and some of the deep south...3. your making 200k working for google and who the heck needs 100 a month cash flow and all the hassles that creates.. better to concentrate on moving up the google latter and investing in tech companies that you know and understand.. what you don't know and understand when your on the west coast is how the heck people live in other parts of the country and how there can be so many low end valuless homes...

Unfortunately, I have no shortage of dirty grout, so I will be able to try this out and see how it works.

The National Association of Realtors (NAR) estimates a shortage of 6.5 million single-family residential (SFR) homes nationwide.

There population growth is exploding and there is already a housing shortage which is pushing people into the suburbs which is making commute times longer and less desirable.

There's a horrible shortage of child care in the area, and we're also the nicest facility.. so families are fighting to get in there.

As you can see, we are facing an acute inventory shortage especially at the lower price points.

Is there a shortage/surplus?

Ian, some thinngs to consider: LA has a housing shortage, and we are in a multi-family building boom in part to address this problem.