As home prices continue to rise in most markets and sales activity looks to maintain its momentum, the supply of homes for sale — both new and resale — is as low as it has been in decades. “We had 48 months of depression in the housing industry,” notes Karl E. Case, co-developer of the Standard & Poor’s/Case-Shiller home price index. “There is no question that we have turned what seemed to be a headwind into a tail wind.” If his assessment proves true, the economic benefits will be significant with regard to everything from carpet and furniture sales to state and local government spending. Looking ahead, there may be pent-up demand for housing not from people without it but from existing homeowners who want to move but have been waiting on the sidelines until the economy and the real estate sector showed sustained signs of improvement. Such folks might view breaking even on their current residence as an indicator that it is time to trade up. The National Association of Realtors notes that the proportion of distressed sales has been declining slowly as of late as has the discount that they offer. In December, according to NAR, 12 percent of sales were said to be of foreclosed homes and an equal number were short sales. Those figures should continue to decline, as evidenced by Moody’s recent report that the “shadow inventory” of homes with foreclosures pending and homes already owned by banks but not on the market is declining. | Read More