Housung Inventory Drops in May

Housing inventory drops in May

According to data compiled by ZipRealty Inc., a real-estate brokerage firm, the supply of homes available for sale in 28 major metropolitan areas dropped 3.9% in May from April. The data published by ZipRealty include condominiums, single-family homes, and town houses listed on local multiple-listing services. The inventory in May dropped 24% year-over-year. The figures compiled by ZipRealty may not be presenting the exact level of supply since half of foreclosed homes are not included on multiple-listing services at any given time on account of such homes awaiting repairs or being subject to litigation. Thomas Lawler, a housing economist, says the decline in housing inventory indicates "that home prices in many parts of the country could be nearing a bottom." However, some economists have a different view and expect home prices to continue to drop for many years to come. Robert J. Shiller, a professor of economics and finance at Yale, believes that the housing market's poor
performance may linger even if there is a quick end to the current recession. Shiller, in a recent article, pointed out that after the last home price boom, which ended about the time of the 1990-91 recession, home prices did not start moving upward, even incrementally, until 1997. Shiller says, "Something is definitely different about real estate. Long declines do happen with some regularity."

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