Home Listings Slide: Good News, Sellers?

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Home Listings are declining in several major metro markets. Is it good news for home sellers?For the first time in nine months, several U.S. housing markets saw a drop in home listings -– but what does that mean for hard-luck homesellers?

The number of homes listed for sale in 26 major metropolitan areas dropped an average 3.3 percent in October, the first month-over-month drop since January, according to ZipRealty Inc. The data comes from single-family homes, condos and townhouses on local multiple-listings services (MLS).

Typically, analysts would expect to see home listings increase during October, as most homeowners make one final sales pitch before the winter home buying lull sets in. Last October, for instance, housing inventory rose 13 percent in the 26 markets covered by ZipRealty.

So is this good news for homeowners struggling to sell?
Not likely. The drop in home listings could merely reflect a larger percentage of homeowners who've decided to call off their sales efforts until prospects improve.

The drop-off may also be a lingering effect of the foreclosure freeze, as banks continue to investigate claims of the so-called "robo-signing" of foreclosure documents. This is certainly the case in Florida, which has one of the highest rates of foreclosure in the nation. (See a metro area breakdown of housing inventory at the Wall Street Journal.)

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