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Inventory Levels Easing As Home Prices Rise, Negative Equity Retreats http://www.forbes.

com/sites/morganbrennan/2013/06/14/tight-housing-inventory-levels-ease-ashome-prices-rise-negative-equity-retreats/ June 14, 2013 For months the pool of available homes has dramatically dwindled as more buyers have jumped into the recovering housing market. Burgeoning demand for that shrinking supply has fueled home price increases across most of the U.S. and in the most sought-after areas, full-fledged bidding wars amid claims of nascent housing shortages.

Now that inventory crunch is beginning to ease. More owners are starting to list their homes for sale, according to The San Jose, Calif,-based listing site, owned by Move MOVE -1.09% Inc., says listing inventory has surged 25% since the start of the year, outpacing seasonal increases associated with the Spring/Summer selling season. In May inventory levels grew by nearly 6% from April, to about 1.85 million homes for sale.

“Overall, we’re seeing seller confidence beginning to respond to consumer demand,” said Steve Berkowitz, chief executive of Move, in the report. “Nationally, there are more homes going on the market for a shorter amount of time. And this is happening in our hot markets on a much larger scale.”

Confidence among prospective sellers is rising. A recent survey from Fannie Mae found that 40% of Americans believe now is a good time to sell. That’s up from 30% a month ago and 16% a year ago.

In markets that refers to as “previously hot” like Sacramento and Stockton, Calif., a wave of newly listed homes has begun replenishing inventory levels. Sacramento’s available inventory swelled 35% from a month earlier while Stockton’s surged 37%. Other areas welcoming more listings are Daytona Beach, Fla. and Washington, D.C., with inventory jumping nearly 22% and 13% respectively.

A major catalyst propelling more homes onto the sale block is prices. April home prices were 12% higher than a year ago, according to CoreLogic CLGX -0.5%, an Irvine, Calif.-based data firm, marking the 14th straight month of price gains. Of the top 100 metro areas, 94 logged year-over-year increases. In turn, homes are hitting the sale block with higher price tags: nationally, homes listed for $199,000 in May, or nearly 5% more than they did last year, according to

lifting the values of nearby homes and entire neighborhoods. 12 months ago when signs would go up and stay up. we expect that growth to decelerate by the end of this year and into next year as inventory begins to rise and ease the tight supply pressures. He says unsold inventory rose 22% from the start of the year through April. Negative equity.85 million homes. realtors say homes are coming on and off the market at rapid pace. “High negative equity had a lockout effect on homeowners by making it harder to participate in the home sale market. CoreLogic reports that 850. available housing stock remains constrained by historical standards and remains 10% lower than this time last year. refers borrowers who owe more on their mortgages than their home is worth. deputy chief economist of CoreLogic. at 1. but the rise in prices is in the early stages of providing relief to tight supply pressures. or underwater mortgages.” projects Khater. Still. But as home prices rise. say. more borrowers become right-sided on their mortgages. chief executive of ZipRealty ZIPR +1. That’s twice the typical average yearly increase and the third highest national increase since the early 1980s.000 homeowners returned to positive equity in the first quarter of 2013. “Across all of the markets that we’re looking at. Calif.61%.” . “While we expect strong price growth in the near term due to still -tight inventory.7 million from 11. “Consumers see signs go up and signs come down and that makes people feel very different about the market than. 22% of the homes that sold in the past 30 days were on the market for less than 7 based national real estate brokerage. be it an out-of-pocket expense on the loan at closing or a credit loss associated with a strategic default. according to Realtor. an Emeryville. One of the major reasons inventory has been so contracted is that millions of homeowners have not financially been able to offload their homes without taking a loss.That upward ascent has a ripple effect. In the meantime. This in turn has been helping more homeowners climb out of negative equity.4 million over the same period last year.” explains Sam Khater. bringing the number of underwater homes down to 9. But the uptick in listings hints that the market may slowly be moving toward a more sustainable balance between supply and demand.” asserts Lanny Baker.

This in turn is beginning to fuel more listings: the firm says it has tracked an 8% increase in the number of homes for sale year-over-year. the heated sales pace still places inventory levels 30% lower than last year in terms of months-worth of supply.ZipRealty compiles data for the 24 metro markets in which it has a presence. says the realty firm. In April sales prices rose more than 16% from a year earlier. with most homes selling near their full asking price. Yet. . with more buyers jumping into the market.