Excerpt from Diana’s Realty Check at cnbc.com:
A new report from Redfin shows new listings of existing homes dropping across the nation compared to a year ago. Seattle listings down 20 percent, Chicago down 17 percent, Boston down 7 percent and Atlanta down 21 percent to name a few.
When you look closer at what type of inventory they’re talking about, it’s the regular, non-distressed inventories that are falling the hardest. Bank-owned new listings are down too, but that’s largely thanks to all the robo-signing delays. It’s simple math. Sellers are afraid of still-falling prices.
“In most of the major markets, at least on the coasts, we’re seeing inventory down 20 to 35 percent, so regular homeowners are not going to list their homes at these prices,” says Redfin CEO Glenn Kelman. “If you had a home to sell, you’d probably wait a year if you could. You’d have to have a hole in your head to list it now because prices are down.”
REO (bank owned) and short-sale inventory is high and will likely get higher in the coming months as banks process more foreclosures and push through short sales more efficiently. But organic, non-distressed sellers are holding off, and that is actually creating a phenomenon we haven’t seen since the housing boom.
“We’ve had bidding wars in Seattle, Portland, San Francisco, Atlanta, Washington DC, across the U.S. We have seen increased demand and limited supply, especially for those pretty homes that are listed by regular owners rather than the distressed inventory that’s listed by the banks,” claims Kelman.
I have to say I believe him, because in my DC neighborhood, where there are very few foreclosures if any, there are also precious few listings. I’ve been watching my local listings for years, from boom to bust, and the current pickings are slim.
Could this inventory issue be the catalyst to home price stability? I’m not talking about the big bad foreclosure markets, but the rest of the country, where demand is rising and the number of listings are falling. I hate to go back to that boring old theory of supply and demand, but might it actually prevail?