Inventory for sale hits four-year low

Source: Wall Street Journal

The number of homes listed for sale in September fell to the lowest level in more than four years, offering a mixed signal about the health of the U.S. housing market.

The 2.19 million homes listed for sale was down by 3.3% from August, which had been the previous low for the year, and about 20% from the year-earlier period, according to data compiled by Realtor.com. It is also the lowest level since Realtor.com began its count in January 2007.

Falling inventories are typically a sign of health because that leads to less downward pressure on home prices. But real-estate agents and home buyers across the country have increasingly voiced frustration with what many say are slim pickings. As a result, the latest inventory declines may point instead to the housing market’s continued disrepair.

Banks have slowed down their foreclosure processes over the last year, which could lead to lower volumes of bank-owned properties hitting the market. Meanwhile, sellers, frustrated with lowball offers, could be taking their homes off the market to wait for a sign that prices have stopped falling.

The decline in inventory is also troubling because it suggests that there are fewer opportunities for buyers and sellers to strike deals and engage in price discovery. That can further chill sales as buyers become afraid to overpay while sellers are similarly cautious about under-pricing their home.

During the month of September, listings of unsold homes fell by 7% in Portland, Ore.; by 6.6% in Dallas; and by 5.6% in Atlanta. None of 30 major markets tracked by Realtor.com posted an increase.

Home inventories typically decline by around 3% in September, according to Zelman & Associates, a research firm. Inventories surged in July 2010 following the expiration of tax credits for home buyers and fell steadily until May 2011.

For the 12-month period ending in September, median asking prices rose by 26% in Miami, by 6.7% in Washington, D.C., and by 5% in Fort Lauderdale, Fla. Median asking prices fell by 11% in Las Vegas, by 10% in Detroit, and by 8.6% in Atlanta and San Francisco.

The Realtor.com figures include sale listings from more than 900 multiple-listing services across the country. They don’t include all homes for sale, including those that are “for sale by owner” and other properties that aren’t marketed through multiple-listing services.

URL to original article: http://www.builderonline.com/builder-pulse/inventory-for-sale-hits-four-year-low.aspx?cid=BP:101711:JUMP

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