Inventory of Homes for Sale Declines
The number of homes listed for sale declined in many metropolitan areas in January, a month when the supply normally increases.
The supply of homes available for sale in 29 major metropolitan areas at the end of January was down 2.5% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. The ZipRealty data cover all single-family homes, condominiums and town houses listed on local multiple-listing services in metro areas where the firm operates.
On a national basis, inventories typically rise sharply in January after the holiday lull. Over the past 25 years, the average increase in January from the prior month has been 8.7%, though the supply has occasionally declined during January, according to Ivy Zelman, chief executive of Zelman & Associates, a research firm.
A shrinking supply is a positive sign for housing demand, but it probably doesn’t mean a rebound is at hand. Ms. Zelman doesn’t see any near-term recovery for the market. She said the latest data reflect price-cutting by banks that has helped them clear more foreclosed homes off the market. She added that homeowners who don’t have an urgent need to sell are keeping their homes off the market amid falling prices.
Patrick Lashinsky, chief executive of ZipRealty, noted that inventories in December didn’t shrink as much as usual. Sellers hoping to move in the summer may have put their homes on the market in late 2008 rather than waiting for January or February as usual because they know houses are generally taking longer to sell. Potential buyers are being very picky and spending more time looking, Mr. Lashinsky said.
Another provider of housing-market analysis, Altos Research LLC, says the number of listings in its 10-city composite index declined 3.3% in January from the prior month. Compared with the year-earlier month, the January inventory in the 29 metro areas covered by Zip was down about 13%.
Nationwide, about 3.7 million previously occupied homes were listed for sale at the end of December, according to the National Association of Realtors. That is enough to last about nine months at the current sales rate. A six-month supply has long been considered a rough balance between supply and demand.
These inventory data don’t capture the entire housing supply, however. Newly constructed housing and foreclosed homes, a big part of the supply, aren’t always included in Realtors’ multiple-listing services. In addition, many people have taken their homes off the market in the hope of getting a better price later. Those homes will come back on the market eventually.
The Zip data don’t cover New York City. But Miller Samuel Inc., an appraisal firm there, reports there were 9,627 cooperative apartments and condominiums on the market in Manhattan at the end of January, the highest level in the past decade. That was up 6% from December and up 36% from January 2008.
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