Housing Inventory Soars Across the Country

A sharp increase in homes offered for sale last month suggests that Florida mortgage shoppers will find plenty of choices this spring.

The number of homes listed for sale in 18 major U.S. metropolitan areas at the end of March increased 6.5% from a month earlier, according to data compiled by ZipRealty Inc., a national real estate brokerage firm in Emeryville, Calif. The data cover listings of single-family homes, condominiums and town houses on local multiple-listing services.

Over the past 22 years, home inventories nationwide have increased an average of 1.7% in March from February, according to Credit Suisse Group. Supplies typically rise modestly in March as sellers pursue the many families with children who seek new homes in the spring, so they can move during summer vacations.

The big rise in the latest month may reflect sellers’ expectations that it will take much longer to find Florida home mortgage borrowers than it did during the housing boom of the first half of this decade, said Patrick Lashinsky, president of ZipRealty.

Rather than waiting for April or May, he said, many people planning to move this summer put their homes up for sale in March. He added that many sellers are being cautious, waiting to sell their old homes before committing to buy new ones.

ZipRealty recorded the biggest increases in the metro areas of Los Angeles (12.8%), San Francisco (12.2%) and Washington, D.C. (9.4%). The Miami housing market, where a glut of unsold condos has been weighing on the market, showed a modest rise of 1.8% in the supply of all types of homes in March from a month before.

But the Miami inventory was up 61% from a year earlier. For all 18 metro areas, the inventory at the end of March was up 35% from a year earlier.

Large inventories have caused prices to level off or fall modestly in much of the country over the past year or so.

The recent surge in defaults on subprime Florida mortgages - loans to people with blemished credit records - has prompted lenders to tighten credit standards. That tightening is expected to put downward pressure on home prices by removing many potential buyers from the market.

SOURCE: Real Estate Journal