More Good News For Buyers Looking This Spring

Signs also indicate that a fair amount of excess inventory of housing has been wrung out of the market in the past year, which is good news for sellers but could mean buyers have a little less to choose from and a little less authority.

Robyn Seymour - Short Sales Specialist

The inventory of existing homes for sale declined 21% in the year ending in January, bringing the supply to 6.1 months, the lowest level since April 2006. Of course, analysts say this not only was a matter of buyers snapping up foreclosure bargains but also had a lot to do with people taking homes off the market because of sluggish demand and falling prices.
More houses should hit the market in spring, analysts say, including a large number of bank-owned, or REO, properties that were held up in processing last year. With these distressed properties padding supply, prices should remain low for buyers this season.
Moreover, 51% of agents recently surveyed by Coldwell Banker said that sellers are more willing to price their home competitively this year.
Many analysts don't expect "significant and sustained" price increases until 2014 at the earliest.
The good news is that most buyers probably won't lose much equity with a spring purchase. If you're one of the millions facing rising rents, buying could be a smart move, provided you're willing to stay in the house for a while. 
  
Housing market snapshot

Existing-home sales ticked up 0.7% to 4.57 million in January from 4.54 million during the same period a year earlier, according to the NAR. The sales represented a 4.3% increase from the 4.38 million homes sold in December, which is typically a slower month.
NAR chief economist Lawrence Yun says buyers are finally responding to favorable market conditions, including record-low mortgage rates and bargain home prices.
The U.S. median existing-home price declined 2% from January 2011 to $154,700, as distressed properties continued to figure prominently, accounting for 35% of all sales.