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Inventory Shortage Drives Unseasonable December Growth

Homebuyers hoping for more inventory and greater variety in December didn't get their wish, online brokerage ""Redfin"":http://www.redfin.com/ reported in its latest ""Real-Time Price Tracker"":http://www.redfin.com/research/reports/real-time-price-tracker#.Ut12rRDnbIW.


According to the company's data, the total number of for-sale homes dropped to just below 200,000 in the final month of 2013--a monthly drop of 14.1 percent.

While declines are normal for the season, December's decrease was the steepest since at least 2008, says Redfin analyst Tommy Unger.

""The sharp drop likely reflects, in part, declining seller confidence in buyer demand during the fourth quarter,"" Unger said. ""Across 19 markets, total new listings declined 27 percent between November and December, compared to 25 percent in 2012.""


The drop in new listings was made worse by a 5.6 percent monthly increase in home sales, limiting stock even further.

Combined, December's low supply and high sales activity led to a 0.8 percent gain in home prices--an ""atypical"" improvement in what is usually a down month, Unger says.

""In contrast, December home prices dropped 1.8 percent during 2011 and 1.1 percent in 2010,"" he said.

Despite December's abnormal statistics, Unger says hope remains for the year ahead.

""After a year of frustratingly low inventory for homebuyers, 2014 is likely to bring some relief,"" he said. ""[W]e expect the number of homes for sale in 2014 to increase about 10 percent from 2013 as more homeowners escape negative equity or decide to cash in on recent price gains.""

Relief could come sooner than expected: With the spring season on the horizon, some Redfin agents expect homeowners may strike before the market gets more crowded.

""My home-selling clients in Northern Virginia have been waiting to list their homes in early 2014,"" said agent Anna Schwoerer. ""They believe January and February will be the sweet spot when they can sell their home quickly, for a great price, while also enjoying a smaller selection of competing homes for sale.""


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