Housing Inventory Declines By James R. Hagerty The Wall Street Journal 11-05-2009

Housing Inventory Declines
By James R. Hagerty
The Wall Street Journal
November 5, 2009

The number of homes listed for sale fell in many U.S. cities in October as buyers sought to qualify for a federal tax credit.

The supply of homes available for sale in 27 major metropolitan areas at the end of October was down 2.8% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. ZipRealty data cover all single-family homes, condos and town houses listed on local multiple-listing services in metro areas where the firm operates.

Inventories typically increase in October. On a national basis over the past 25 years, they have grown about 1% on average in October from September, according to Zelman & Associates, a research firm. Ivy Zelman, chief executive of the firm, said she believes the drop in inventory this year reflected a rush by first-time home buyers to qualify for a federal tax credit due to expire Nov. 30. Congress is expected to extend that tax credit for five months and make it available to some people who already own homes.

Compared with the year-earlier month, the October inventory in the 27 metro areas was down 29%.

The exact level of supply is hard to measure because properties included on multiple-listing services don't include all of the foreclosed homes that banks are preparing to sell. They also don't reflect what many analysts believe will be a huge supply of bank-owned homes likely to hit the market over the next few years.

The Zip data don't include New York City. But Miller Samuel Inc., an appraisal firm there, says there were 8,251 cooperative apartments and condominiums on the market in Manhattan at the end of October. That was down 7.6% from a year earlier.