As a fairly new host myself, I quickly learned that inquiries were far from being bookings, and that many folks send out inquiries for various reasons, and that many are simply shopping around.
I encountered a similar situation to yours, having engaged in a bit of conversation with a prospective guest, when another inquiry came in for the same days. In that case, I contacted guest 2, let them know I had someone seriously interested based on the extensive communication we had shared, wrote guest 1 telling them about guest 2, and giving guest 1 two hours to respond by making an actual booking - which they did!
What I learned from the experience is that in the future, when responding to an inquiry, I would make it very clear that although my property might be currently available, it is not considered reserved until there is an actual booking. I felt that in my first experience, I was not clear, and that our communication went on longer than was needed without an actual booking, simply because I had not created any sense of urgency. I will be more firm in my communication from now on.
Hope that helps!
Jude