REALTOR® Magazine-Daily News-Supply of Houses Finally Rising in Parts of U.S.

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Daily Real Estate News | August 31, 2004 | Supply of Houses Finally Rising in Parts of U.S. The number of houses on the market is finally rising in some parts of the U.S. where shortages have led to soaring prices. The new supply should help soften price increases, and some economists say it may eventually bring prices down in some places where they have risen at double-digit rates in the past few years. The NATIONAL ASSOCIATION OF REALTORS® reports that the U.S. housing inventory is still tight, at 4.3 months, down from 4.7 months a year earlier, but some markets have seen a noticeable boost in supply. The inventory of homes for sale in Orange County, Calif., for instance, rose from 1.4 months in April to 7.5 months in July; and year-over-year gains have hit the double digits in more than a dozen New Jersey counties as well as in Boston. What University of California at Los Angeles economist Edward Leamer calls "a day of reckoning" is expected to arrive slowly, mainly because homeowners would simply stay put if prices dramatically fell. While some experts worry about appreciation outpacing incomes and rents, NAR chief economist David Lereah and other industry insiders believe that low interest rates will continue to fuel the housing boom.

Source: Wall Street Journal (08/31/04); Hagerty, James R.