A couple days ago I wrote about how the number of homes for sale in Deschutes County is lower than it has been since April 2006. It turns out that Central Oregon is not the only area in the country with low numbers of homes for sale. Realtor.com is reporting that nationwide inventory is at its lowest point in four years since it began tracking the number of homes for sale in 2007. October was the fifth consecutive month of declining inventory with the total number of listings nationwide 21 percent below levels recorded in October 2010. Of 146 metropolitan statistical areas tracked by Realtor.com, 144 had fewer homes for sale in October than they did a year earlier.
Any number of factors can lead to low numbers of homes for sale but there are two that are the main culprits in this situation. Home owners don’t want to list their homes for sale unless it is absolutely necessary because prices are so low and banks are taking longer than ever to get foreclosed homes on the market. This presents a Catch-22 for the housing market. Fewer homes for sale should lead to higher prices and to some extent we are seeing that or at least a leveling off of prices. The problem is, there are still millions of distressed homes likely to come on the market in the next few years as either short sales or foreclosures. As long as those distressed homes are out there they will continue to put downward pressure on prices.
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