The WSJ on price reductions

In this Wall Street Journal housing report($) on rising inventory, the chart below could be found if you clicked on the link below where it says "MORE" on the main page of the story.

It appears that sellers are finally getting the message that there are few ways to move property when inventory is so high and sentiment is so low - at least sellers of Bank Owned Property are getting the message.

Total listing of homes for sale were up 2.5 percent from May to June, a time of the year when, historically, inventory declines but a period that has seen inventory increase in the last few years. The data was compiled by ZipRealty Inc. and includes all listings for single-family homes, condos, and townhouses on multiple-listing services.

The continued growth in supply suggests further downward pressure on house and condo prices in parts of the country. After soaring in the first half of this decade, prices in many markets have been flat to lower over the past two years amid a supply glut and more-cautious mortgage lending.

Thomas Lawler, a housing economist based in Vienna, Va., predicted that the S&P/Case-Shiller home-price index, a national measure, will decline about 7% this year. He said that the housing market is unlikely to start recovering before mid-2008 at the earliest and that the recovery probably will be gradual. Among the wild cards is whether builders will slash production, which would reduce the glut of homes.

Mr. Lawler appears to be brutally honest about the recovery - a year from now at the earliest - but why do they always pick on the homebuilders?

David Lereah's replacement as chief economist at the National Association of Realtors, Lawrence Yun, said the same thing not more than a month or two ago - if only the homebuilders would stop building, then maybe things would turn around.

Sales of new homes only account for about one-sixth of the total number of homes on the market. Before you know it they'll be saying, "If banks would slash the number of foreclosed properties they're putting back on the market, we'd see a rebound in housing".