Homes for Sale Jump in San Francisco
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- Kara Johnson | October 05, 2010
Housing inventories rose in September for the ninth consecutive month, including sharp increases in San Francisco, Las Vegas, Los Angeles and several other metropolitan areas that were hardest hit by the collapse of the housing market.
The San Francisco area posted the sharpest one-month increase in homes for sale, a 5.4 percent rise from August. Las Vegas was close behind with a 5.3 percent gain, followed by Los Angeles at 4.6 percent. The Phoenix metropolitan area was not far behind at 4.2 percent. All experienced some of the nation’s largest declines in housing values when the housing bubble burst.
The 26-city survey by ZipRealty showed an average annual increase of 13.6 percent in real estate listings, the Wall Street Journal reported, with an 0.6 percent average rise in September.
Foreclosures coming to market
The sharp boost in September, at a time when housing inventories typically decline, suggest that more foreclosures are coming on to the market, as lenders seek to clear out a backlog of bad home loans. The foreclosure tracking firm RealtyTrac recently reported that lenders repossessed a record 95,000 homes in August, the ninth consecutive month that completed foreclosures have risen on an annual basis.
That also generally coincides with the rise in housing inventories, which began to turn upward last December.
The increase in homes for sale is not directly correlated to the state of the local housing market, however. The Miami region, which has one of the nation’s most stricken housing markets in terms of fallen home values and foreclosure rates, showed only a 0.4 percent inventory gain in September and has actually posted a slight decline in inventories over the past 12 months.
More homes equals lower prices
For homeowners looking to sell, increasing housing inventories are a problem because they tend to depress housing prices and lengthen the time a home stays on the market. Falling prices also cause lenders to become tighter with credit, increasing the difficulty for buyers to obtain a mortgage.
In response, many sellers are cutting their prices in an effort to sell. All but two of the 26 cities in the ZipRealty survey, at least 40 percent of the properties on the market had their price reduced at least once, and seven had price reductions on more than half.
Jacksonville, Fla. had the largest percentage of price reductions on listed homes, at 55.0 percent, followed by Phoenix at 54.1 percent. Denver had the lowest percentage, at 33.2 percent, Ironically, the next lowest markdown rates were posted by Los Angeles, Miami and the San Francisco Bay Area, at 37.6, 42.0 and 44.4 percent, respectively, suggesting that many homeowners there continue to hold the line despite the overall downturn in prices around them generally.
Chicago had the largest number of homes for sale, at 69,328, followed by Los Angeles and Miami at 51,970 and 46,769, respectively.
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