Bubble Bursts: Unsold Housing Inventory Up 29% over May 2006

June 6, 2007 (LPAC) --The bubble is bursting. The number of homes listed for sale in 18 major U.S. metropolitan areas at the end of May rose by 5.1% in just one month, according to real-estate brokerage firm ZipRealty Inc.--named for the speed of turnover it once enjoyed on its transactions.

Compared to May of 2006, combined inventory was up a sharp 29% for the 15 cities for which such comparisons were available, the firm reported. A further drop in prices is expected as a result.

Meanwhile, the National Association of Realtors conceded somewhat to the reality of the collapse, saying drops in home sales and prices are going to be worse than originally forecast.

Sales of existing homes are now expected to fall by 4.6% to an annual pace of 6.18 million units in 2007, down from 6.29 million units it estimated last month. NAR also predicted that the median sales price will decline 1.3%, worse than the 1.0% drop it forecast previously.