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Oct 17

Lowest level of homes for sale since 2007

The housing market, which has struggled with an oversupply of homes for years, is facing a new problem: a lack of attractive inventory.

FOR SALE properties down 20%

There were more than 2.19 million homes listed for sale at the end of September, down 20% from a year earlier, according to a new report from the real-estate website Realtor.com. That is the lowest level since the company began its count in 2007.

The report is the latest sign of how the U.S. housing market can’t seem to catch a break. While falling inventories are typically a sign of health, because reduced competition can boost prices, that isn’t the case right now.

Shrinking demand not driving prices up

… People are pulling their homes off the market rather than try to sell them at today’s discounted prices. At the same time, banks have been more slowly moving to take back properties through foreclosure ever since processing irregularities surfaced last fall, temporarily reducing the supply of foreclosed properties. The shrinking supply isn’t driving up prices because demand is soft.

Weak demand not the problem…

Industry executives say shortages of well-priced and attractive homes are a bigger drag on sales than sluggish demand.

“As weak as demand is, inventory has been weaker,” said Glenn Kelman, chief executive of Redfin Corp., a Seattle real-estate brokerage firm that does business in 13 states. “Right now, the absence of inventory is the limiting factor on sales volume.”

 

Click the link  for an interactive chart showing median prices and inventory levels for the major US cities: http://online.wsj.com/article/SB10001424052970204479504576635543877062266.html

For more about this topic, click this link: Wall Street Journal, October 17, 2011.

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