Zillow reports there has been a significant drop in the number of homes for sale in the U.S. when compared to last February. The real estate research firm notes a 16.6% drop in listings, and experts say it’s a matter of too many people trapped with negative equity or afraid to sell because they won’t find another house they like after the deal is done. Experts say the problem will solve itself, however, as fewer homes are likely to drive up home prices, which will encourage more people to put their homes on the market. For more on this continue reading the following article from Property Wire.
There are fewer homes on the market in the United States at a time when the market is entering its busy Spring selling season, the latest data shows.
The overall number of homes listed for sale nationwide on Zillow was down 16.6% year on year in late February.
Nationwide, the greatest year on year decreases in inventory were among more expensive homes, with the availability of top tier properties falling 20.5%. That was followed by middle tier homes down 17.2% and bottom tier homes down 9.1%.
Only five metro areas showed more homes for sale overall last month than in February 2012. In El Paso Texas they are up 18.5%, in Albuquerque New Mexico up 8.1%, in Little Rock Arkansas up 7.7%, in Fort Myers Florida up 1.5% and in Youngstown Ohio up 0.25%.
‘The supply of for sale listings continues to dry up, driven in part by potential sellers trapped in negative equity and homeowners that won't sell out of fear they won't be able to find a suitable home to buy later,’ said Zillow chief economist Stan Humphries.
‘But the impact of constrained inventory will create the solution to the problem. Over the past year, inventory tightness has contributed to increases in home values in many markets. As home values rise, some home owners will be freed from negative equity and able to list their homes, which will contribute to an easing of the inventory crunch,’ he explained.
‘While this inventory is coming, it may still be a frustrating spring for buyers vying for what inventory is available. It's important to be patient and not commit to paying beyond one's comfort level in the heat of negotiations,’ he added.
Large California metros experienced the biggest decrease in homes for sale over the past year. Among the 30 largest metros covered by Zillow, four of the top five in inventory contraction are located in California. In Sacramento they fell 48%, in Los Angeles 45.7%, in San Francisco 40.9% and in San Diego 39.4%.
While the overall number of homes listed for sale in February was down year on year, the drop was less severe than in January when the number of for sale listings was down 17.5% year on year, which the firm said could indicate an easing of the inventory crunch.
Almost two thirds (63) of the areas surveyed showed a smaller year on year decline in for sale homes in February than in January.
This article was republished with permission from Property Wire.