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There is currently an eight-month supply of homes on the market — meaning that, at the current sales pace, it would take eight months to run through the backlog.

That’s still a lot compared to the six-month supply that is expected in a normal market, but it is much better than it was. In March, there were nearly 2% fewer homes on the market than there were a year ago, and 21.7% fewer than the record of 4.6 million in July 2008. In some areas, supplies are even bidding-war tight. In Denver, for example, supply has fallen to 5.7 months from 6.2. In Phoenix it has declined to 4.5 from 5.2; and in San Francisco inventory has halved, to 3.2 months from 6.5 last March.

In California, almost all cities have a short supply of single-family homes. That’s especially true in the lower-priced categories, according to Leslie Appleton-Young, chief economist for the California Association of Realtors. The supply of homes that sell for less than $300,000 is at 3.2 months statewide, down from an already low 3.3 month supply 12 months ago. Inventory of moderately priced homes, those between $300,000 and 500,000, fell to 4.2 months in March, down from 4.5 months in March 2009.

There are plenty of more expensive homes in California, but this inventory is going quick: inventory for million-dollar-plus homes has dropped from 21.6 months to 10.9 months.

In the higher price ranges, sales are slower than they would be because of continued problems in obtaining financing. Right now, most jumbo-mortgage lenders require down payments of 30% to 35%, but as that eases, sales of higher end homes should rise and supplies fall.

Sales of new homes surged 27 percent last month, bouncing off the previous month’s record low and blowing past expectations as government incentives and better weather boosted sales.

The Commerce Department said Friday that new-home sales rose in March to a seasonally adjusted annual sales pace of 411,000. It was the strongest month since last July and the biggest monthly increase in 47 years.

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Sales of new and previously owned vacation homes rose last year, while investment-home sales dropped, according to a survey report by the National Association of Realtors.

NAR’s 2010 Investment and Vacation Home Buyers Survey includes responses from residents in 1,930 randomly selected households who bought residential real estate in 2009. The association conducted the survey in March 2010 and controlled for age and income.

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December home sales in the Coachella Valley rose 21 percent compared to November, the California Desert Association of Realtors reported Friday.

Greg Berkemer, executive vice president of the association, called the increase impressive.

December sales of Multiple Listing Service homes here, when stacked against the National Association of Realtors report that sales fell 16 percent in December from a month earlier, tell a much different and far more robust story, Berkemer said.

Compared to a year ago, December sales were up 30 percent from 2008, a year described as one of the worst for home sales in many decades.

The desert is faring better than the country as a whole, Berkemer said, for two reasons:

It’s the sales season.

Read the full article on The Desert Sun