The Wall Street Journal
By JAMES R. HAGERTY
The number of homes listed for sale in many U.S. cities continued to fall in April in what some analysts see as a sign that the market may be nearing a bottom. But the picture is clouded by uncertainty over how many foreclosed properties will hit the market.
The supply of homes for sale in 29 major metropolitan areas at the end of April was down 3.6% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. The ZipRealty data cover all single-family homes, condominiums and town houses listed on local multiple-listing services in metro areas where the firm operates.
On a national basis, inventories typically increase in April as for-sale signs bloom for the spring home-shopping season. Since 1982, the average increase in April from the prior month has been 4.8%, according to Zelman & Associates, a research firm.
Compared with the year-earlier month, the April inventory in the 29 metro areas was down 21%.
The National Association of Realtors says about 3.7 million homes were listed for sale nationwide at the end of March, down 10% from a year earlier. But that number doesn’t include all of the foreclosed homes that banks aim to sell.
Fannie Mae and Freddie Mac, among the biggest owners of foreclosed homes, typically have only about 35% to 50% of those homes listed for sale at any given time, according to industry estimates. At one of the nation’s largest banks, about 60% of the foreclosed homes are listed, according to a person familiar with the situation. Some foreclosed homes aren’t listed because they are being offered for rental; others are awaiting repairs or are subject to litigation or other delays.
Tom Lawler, a housing economist based in Leesburg, Va., says the decline in listings “suggests that the bottom in home prices is much closer than many pundits believe.” He also notes that housing construction has plunged. But he cautions that it’s unclear how many foreclosed homes will go on the market in the months ahead.
Barclays Capital estimates that banks and loan investors owned 765,500 foreclosed homes as of April 1, up from 629,100 a year earlier. Barclays forecasts that this inventory will peak at around 1.3 million homes in mid- to late-2010.
The Zip data don’t cover New York City. But Miller Samuel Inc., an appraisal firm there, reports there were 10,369 cooperative apartments and condominiums on the market in Manhattan at the end of April. That was down 0.7% from March but up 20% from April 2008.
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