Fewer homes for sale in Valley

The number of homes for sale in metro Phoenix is declining, a sign that the housing market could start to recover this year. However, foreclosures and short sales continue to dominate the region's home sales. Data from the Arizona Regional Multiple Listing Service show the number of homes for sale in the Phoenix area dropped by almost 3,000, to 42,500, in December. Fewer homes for sale means less supply. Demand from homebuyers must return to balance out the healthy equation for the market. Housing inventory averaged about 43,000 a month during 2010. A lasting concern has been that lenders will try to resell too many foreclosures at once, driving up supply as they did in early 2009 when home prices fell. Lender-owned home sales climbed to 48 percent of all home sales in December. That was the highest share for foreclosure resales during 2010. Short sales accounted for 20 percent of all the region's home sales last month.

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