As inventory falls to a four-year low, the question now is: Scarcity or just plain scared?

Source: Wall Street Journal

The number of homes listed for sale fell for the fifth straight month in October, hitting the lowest level in more than four years.

The 2.12 million homes listed for sale in October was down by 3.5% from September and down by 21% from one year ago, according to data compiled by Realtor.com.

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.

Inventories typically rise by around 0.8% in October from September, according to Zelman & Associates, a research firm. But they have been falling for several recent months amid a slowdown in foreclosures by banks and as home sellers, frustrated by low-ball offers, hold their properties from the market.

Inventories declined in 29 of the 30 major metro areas during October, led by Portland, Ore. (-6.9%); Seattle (-5.3%); and Dallas (-5.2%). Inventories increased in Phoenix by 0.4%.

Six markets saw a monthly uptick in median asking prices, led by Phoenix (5.1%), Dallas (1.2%), and San Francisco (0.6%). Prices were flat in another eight markets, while they fell in 16 metros including Cleveland (-2.3%), St. Louis and Philadelphia (-2.1%).

For the year, the inventory of homes listed for sale is down most sharply in Miami (-49%), Phoenix (-48%), and Orlando (-45%).

The National Association of Realtors also reported a decline in the number of homes on the market. At the end of October, total housing inventory fell 2.2% to 3.33 million homes, the lowest level of the year.

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