Tight inventory puts damper on home sales

With the number of homes on the market down 25.3% from last year, the pace of sales is basically stagnant. It's a seller's market in many cities.

By Teresa at MSN Real Estate Feb 21, 2013 12:59PM

© PhotoAlto/Eric Audras/Getty ImagesSales of existing homes rose marginally in January, as would-be buyers continued to find very little to buy.

 

The number of homes for sale is at its lowest level since December 1999, according to the latest data from the National Association of Realtors.

 

The number of homes sold in January was 9.1% above last year’s number and up 0.4% from December; inventory was down 25.3% from a year ago.

 

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"Buyer traffic is continuing to pick up, while seller traffic is holding steady," Lawrence Yun, the NAR’s chief economist, said in a news release. "In fact, buyer traffic is 40% above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country."

The national median home price rose to $173,600, up 12.3% from the previous year.

 

Foreclosures and short sales accounted for 23% of January sales, down from 35% in January 2012. The average foreclosure discount was 20%, and the average short-sale discount was 12%, the NAR reported.

A number of factors are keeping sellers from putting their homes on the market, and inventory of homes for sale is particularly tight in California.

 

A total of 27.5% of Americans with mortgages still owe more than their home is worth, which is keeping some from selling. Tight credit means that some families who would like to sell a smaller home and move to a larger one are staying put. And the general economic uncertainty continues.

When enough additional homes will come to market, either new construction or existing homes, is a big question. It probably won't be soon.

 

"We expect a seasonal rise of inventory this spring, but it may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth," Yun said in the news release.

 

 
14Comments
Feb 28, 2013 11:56AM
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Everything stated in this article is 100% correct. Any agent in California, Nevada, Arizona, or Florida will tell you that there's less than 6 weeks of inventory on the market (the very definition of a strong SELLER's market) and everything priced within reason is getting multiple offers. With a few exceptions, this is happening on a smaller scale all over the country.

 

Now I know everyone likes bad news and refuses to believe houses or anything other than ammo and gold are headed for the toilet but at some point you have to just be grateful for some good news. Our national equity is coming back and home builders are starting to hire again. These are good things. Relax for once.

 

Or just sit there with a grumpy look on your face and hit the thumb down button... I really don't care.

Feb 28, 2013 8:25AM
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The bank appraisers are screwing us on our sales of homes using foreclosure houses for comps.   And you wonder why   the sellers are getting screwed.   They are not getting a FAIR MARKET VALUE when they go to sell their house.   With the shitty appraisals the prospective buyers then think they have an edge to get your home for what a run down, neglected foreclosure should sell for.   So the homeowners are still getting screwed.   So wait to sell your home till these forclosures are done and off the market and then you will get  what your home is really worth.  They should not be allowed to compare your home  foreclosed units.  That is not a fair appraisal and that is just what they are doing and the banks are approving it.  I hope those appraisers get stuck with a shitty appraisal when they go to sell their home so they can see just what it's like.   This country needs to file a class action law suit against these appraisers.   That is the only wayu it will stop.  We need to hit them in their own pocketbook.    Nancy

Feb 28, 2013 7:54AM
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Go on homes for sale in Metro Phoenix and it is crazy however we have an acute shortage of homes for sale. We are beginning to see bid ups from listed prices in some communities and home prices have gone up about 20% in the last 12 months. In the more affluent areas prices have gone up even higher by percentage.

Feb 28, 2013 6:36AM
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If there was a 20-24 month inventory on hand and it's now down 25%; that means there is still at least 15-18 months on hand.  Yes; there may be a few markets where people are getting what they are asking and are selling in a timely manner.  But sellers are probably a lot more realistic in their asking price as well.  I'm with most of the people commenting here; these "experts" are either clueless or are just trying to make everyone feel good by blowing smoke up everyone's butt.
Feb 28, 2013 4:53AM
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I don't know where these people get their information, but it doesn't hold true in the market I am currently trying to sell my home. Also, they have another article that tells us all about the foreclosed homes....which I guess are now up for sell? So kudos to anyone who is trying to sell their home and gets what they want for it and sells it in a timely manner. I am not having a lot of luck and am constantly being told "there's so many homes on the market and a lot of competition".
Feb 28, 2013 4:36AM
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 hahahah! this was hilarious- a seller's market? really? When only a 6 months ago it was a buyer's market? Wow, sure glad the economy made such a swift strong turn. Oh wait- that never happened.

 

What a bull$hit, paid for, realty driven marketing piece. Not only is it STILL a buyers market, but with the continuing problems in the economy (unemployment, business closings, sequester, tax hikes, etc.) no amount of historically low inventory will drive prices up when the inventory of BUYERS (those who are ABLE to buy) is even lower. Not to mention that many of these "1.74 million" homes are abandonded to foreclosure and not worth the $ they are being listed for.

 

MSN- do your fact checking, or at least indicate a difference between reporting on fact and fiction (opinion). Sheesh.

Feb 28, 2013 1:48AM
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THE NATIONAL ASSOCIATION OF REALTORS IS A CONTROLLED AGENCY WHICH CONSISTENTLY  CRUNCHES THE STATS TO REFLECT A SITUATION(HOUSING SHORTAGES= HIGHER PRICES=BIDDING WARS) TO CREATE THIS KIND OF ACTIVITY. WHILE THERE IS NO DOUBT THE MARKET HAS IMPROVED IN THE LAST 12 MONTHS, THIS RUNAWAY TRAIN MENTALITY THE NAR AND ITS HEAD CHIMP ARE CREATING IS EXACTLY WHAT LED TO THE DOWNFALL IN THE FIRST PLACE. ARTIFICIALLY CREATE AND ADVERTISE HOUSING SHORTAGES, LOW INVENTORIES; SELLERS MARKETS-TERM IT ANYWAY YOU WANT.HIGH PRICES, BIGGER LOANS,MORE DEBT. AND ALOT OF PEOPLE AGAIN WILL BE SUCKERED INTO PRICE WARS, PAYING MUCH MORE FOR A HOUSE, TO FIND OUT WHEN THEY GO TO SELL IT THEY ARE UNDER WATER. WHAT IS TRULY AMAZING IS THAT PROSPECTIVE BUYERS DO NOT TAKE A STEP BACK AND LOOK AT THE OVERALL PICTURE. BUT , MOST ONLY HAVE THE "I WANT" MENTALITY, THEY WILL GET THEIR MORTGAGE AND WILL REALIZE WHEN IT IS TOO LATE THAT THEY PAID A GOLDEN PRICE FOR PLATED SILVER. THIS IS WHAT HAPPENS WHEN YOU GET CAUGHT UP IN THE MOMENT AND OVER BID.
Feb 28, 2013 12:11AM
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MSN Real Estate should stand for "Must Sell NOW!!!!!".......Instead, apparently it stands for "More Savings, NEVER!!",,,,,,So, now is a seller's market??  Let the banks & mortgage companies keep paying property taxes on those "assets" while the properities keep deteriorating. They created the burst bubble in the first place by making bad loans that people could not pay off (at speculatively HIGH prices), now the "real estate"/banking complex wants to have a second round of high prices/loans that noone wants!!  The greed of the capitalist bankers/real estate brokers/speculative investors is never receding to "REALITY"......i.e., that people that already lost their over priced homes don't have jobs, banks now demand a over 700 credit rating for a mortgage, and the people who managed to keep their homes are paying for a place that isn't worth as much as they paid for it years ago. "You can't lose on real estate" was the favorite saying before the bubble burst in the real estate market. Now, apparently, its "It's a seller's market"!!!!!!  Get REAL, or go home. Oh, that's right, your home was repossessed ...go TENT, RV,or something.
Feb 26, 2013 10:46AM
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Give it another 3 years. This is just another buble created by the same people that did the first one. I can't believe the general public has such a short memory. Investors and banks alike will have to release the inventory as unemployment and income hasn't moved. So who is gonna live in all those houses? LOL
Feb 26, 2013 8:59AM
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What a great way to manipulate the market!!!! Sit on all the vacant and foreclosed homes instead of dumping them and jack the prices up because of low inventory.  And then you still get the corporate write off due to losses on the properties just sitting vacant.
Feb 26, 2013 8:53AM
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I have seen this first hand in my neighorhood.  I just bought a house 3 months ago and there were apoproximately a dozen comp properties in the immedate 1/4 mile radius. Today there are only two and both are not only overpriced, but they both sit on major streets.....combined, probably the reason why they have not been scooped up. Sure glad I bought when I did.....looks like the buyer's playground might be coming to an end in some areas.
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