December Lull in House Shopping Wall Street Journal By James R. Hagerty 01-07-2010

December Lull in House Shopping Wall Street Journal By James R. Hagerty 01-07-2010

December Lull in House Shopping
The Wall Street Journal
By James R. Hagerty
January 7, 2010

The number of homes listed for sale declined in many U.S. cities in December as house shopping slowed for the holidays.

Analysts expect a jump in listings early this year. More foreclosed homes are expected to hit the market, and more sellers may plant for-sale signs, hoping to attract buyers seeking to qualify for a federal tax credit.

The supply of available homes for sale in 27 major metropolitan areas at the end of December was down 4.8% from November, according to figures compiled by ZipRealty Inc., an Emeryville, Calif., real-estate brokerage firm. The data cover all single-family homes, condominiums and townhouses listed on local multiple-listing services in metro areas where the firm operates.

Compared with the year-earlier month, the December inventory in the 27 metro areas was down 26%.

Inventories typically fall in December, with a holiday lull in house hunting. Zelman & Associates, a research firm, says nationwide listings have declined an average of 11% in December compared with the prior month over the past 27 years.

The Zip data don't cover New York City. Miller Samuel Inc., an appraisal firm there, reports there were 6,851 cooperative apartments and condominiums on the market in Manhattan at the end of December, down about 11% from November 2009 and 25% from December 2008.

The number of homes listed for sale fell sharply in much of the country in 2009. Many people who don't have to sell a home have withdrawn from a weak market, awaiting signs of stronger demand. In addition, the number of foreclosed homes available for sale has dropped—for now—because efforts to prevent foreclosures through loan modifications have slowed the process. But an estimated 7.5 million households are behind on their mortgage payments or in the foreclosure process, and many of those homes eventually will hit the market.

This spring, many builders and other home sellers will be counting on buyers wanting to qualify for tax credits on purchases. To qualify, buyers must sign a purchase contract by the end of April and complete the transaction by the end of June.

The tax credit is up to $8,000 for first-time home buyers and up to $6,500 for people who have owned a home for at least five consecutive years during the previous eight years.

The credit is available for individual taxpayers with annual incomes of up to $145,000 or joint filers with incomes up to $245,000.


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