Now that home prices are starting to rise, sellers are starting to come out of the woodwork, which in turn is leading to increased inventories, according to a report from Redfin.
Active listings grew 6.4% between March and April and another 4.2% between April and May, the online real estate brokerage said in a special report.
This is in contrast with 2012, when inventory peaked in January and then steadily declined for the remainder of the year.
Inventories have been tight in certain regions of the U.S. for the past year or so, due partly to the fact that millions of homeowners are underwater with their mortgages and have been waiting for home values to increase before making a decision to sell.
Now, there are signs that many of these homeowners are ready to hit the market.
‘Over the last 12 months, Redfin agents have talked to plenty of homeowners seeking to test the market at a very aggressive price, just so a sale would yield enough money to pay off the mortgage,’ said Glenn Kelman, CEO of Redfin, in a release. ‘Those consultations often ended with a decision to wait.
‘What has changed in the last 60 days is that these owners are now listing, selling – and even appraising – at the price they've needed to get all along,’ Kelman added. ‘People who bought near the peak in 2006 and 2007 – only to get buried in the downturn under a mountain of debt – can now, for the first time in years, see daylight. And they're running for it.’
Total active listings are still down 22% from a year ago, but the trend is improving.
Redfin predicts that if home prices continue to rise, 2013 will surpass 2012 for new listings. In addition, new listings in most markets will move back into the black.
What's more, as supply and demand come into balance, bidding wars will ease and home price increases will moderate, the company predicts.
To view the full inventory report, click here.
To view Redfin's Real-Time Home Price Tracker, click here.