Home Listings Fall but Woes Persist - Wall Street Journal

We sent an email to: Please click on the link inside the email to complete your registration Please register to gain free access to WSJ tools. This service is temporary unavailable due to system maintenance. The username entered is already associated withanother account. Please enter a different usernameThe email address you have entered is already in use. Please upgrade your browser now to enjoy a better experience: Why upgrade. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visitwww. The number of homes listed for sale declined sharply in a number of U. In some cases, inventory levels are at their lowest levels since the housing downturn began five years ago. Shrinking inventory often is seen as a positive sign for housing because it usually means demand is rising, which often leads to higher prices. But in the current environment, the decline in inventory may instead reflect how the market remains anything but healthy. While sales are picking up in some cities, analysts say the sharp decline in inventory also reflects the slow pace at which banks are processing foreclosures. View Interactive The Wall Street Journal's latest quarterly survey of housing-market conditions in 28 major metropolitan markets found inventory levels were down in all but three markets and were down by double digits in 16 markets in the second quarter, compared with a year ago. Listings in Miami were down 43% from a year ago and were off 30% in Washington, D. View Full Image Associated Press A decline in the number of Homes for Sale has raised hopes the market is improving. In the past year, banks have been accused by federal and state officials of circumventing legal procedures when foreclosing on homeowners. To correct those problems, banks are moving more cautiously when repossessing a home. But if banks accelerate foreclosures, inventories will swell again. Otteau says it is too soon to celebrate because "we are all expecting that foreclosure 'tidal wave' to begin sometime soon. Values were still below year-earlier levels in every market. Markets that have struggled with a glut of foreclosed properties posted the biggest quarterly declines, with values down by more than 2% in Phoenix, Las Vegas and Sacramento. Another factor behind falling inventory levels is shifting behavior on the part of sellers, who in recent months have started to yank homes off the market because they couldn't get a high enough offer. Gonzalez Rojas tried unsuccessfully to sell a three-bedroom condo in Philadelphia for $499,000. She and her husband rented it out and in June discussed renewing their tenants' lease for another year. They lose about $1,000 every month but don't want to sell for less than what they owe. Until they sell their Philadelphia home, they are also unlikely to buy a home in Dallas. During the housing boom, landlords lowered rents to hold on to tenants who were leaving apartments to become homeowners. Now that trend has reversed, sending rent levels soaring. Shannon Keyes Woodward, 29, and her husband are ready to move out of a "ludicrously priced" rental apartment in Alexandria, Va. Nearly all the homes in their low-$300,000 price range either need renovations or are scooped up within days of hitting the market, often by investors making all-cash transactions. Out-of-state buyers and foreigners are seeking bargains on vacation properties. Meanwhile, mom-and-pop investors and private-equity-backed buyers of distressed Real Estate are snapping up foreclosures at courthouse auctions with plans to fix them up and resell them for a profit. In some cases, prices are so low that investors are holding on to the properties and renting them. He bought four homes last year, reselling one and renting the other three. Since December, he has been outbid on every property he has offered to purchase. All Rights ReservedThis copy is for your personal, non-commercial use only. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visitwww. To view or change all of your email settings, visit the Email Setup Center. In some cases, inventory levels are at their lowest levels since the housing downturn began five years ago. Shrinking inventory often is seen as a positive sign for housing because it usually . Is it possible that a world without religion can be, on the whole, a better place to live. Question of the Day Are you satisfied with the deficit reduction/debt ceiling deal in Congress. Question of the Day Should the Medicare eligibility age be raised from 65 to 67. Question of the Day Should the Federal Reserve embark on a third major round of quantitative easing. 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