Housing Supply Declined in May

The Wall Street Journal

June 5, 2008

The supply of homes available for sale in major metropolitan areas declined slightly in May.

Total listings of homes in 29 metro areas at the end of May edged down 0.3% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. The data cover listings of single-family homes, condos and town houses on local multiple-listing services in those areas, where Zip operates.

The inventory was up about 0.3% from May 2007 in 18 metro areas for which Zip has comparable year-earlier data.

The numbers are the latest sign that the supply of homes on the market is leveling off. But the supply remains ample. The National Association of Realtors recently said the number of single-family homes on the market in April was enough to last 10.7 months at the current sales rate. That was the highest since 1985. In the first half of this decade, when house prices were soaring, the supply typically was four to five months.

The figures from Zip and the Realtors probably understate the supply of homes because not all foreclosed properties that lenders are trying to sell are listed on multiple-listing services, said Thomas Lawler, a housing economist in Leesburg, Va.

Lenders and investors in mortgages owned 660,000 foreclosed homes in April, up from 493,000 in January and 231,000 in January 2007, according to an estimate from First American CoreLogic. The April total works out to about one in seven previously occupied homes listed for sale nationwide.