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Inventory of Houses Falls in July

By JAMES R. HAGERTY

The number of homes listed for sale declined again in many U.S. cities last month as bargain hunters continued to search for foreclosed properties.

Interactive Graphic: Bargain Hunters Dent Home Supply

..The supply of homes available for sale in 28 major metropolitan areas at the end of July was down 2.5% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. The Zip data cover all single-family homes, condominiums and town houses listed on local multiple-listing services in metro areas where the firm operates.

On a national basis over the past 25 years, inventories in July have fallen by an average of 1% from the June level, according to Zelman & Associates, a research firm. Compared with the year-earlier month, the July inventory in the 28 metro areas was down 27%, according to the Zip data.

The exact level of supply is unclear because the figures don’t include all of the foreclosed homes that banks are preparing to sell. According to some industry estimates, as many as half of those homes aren’t included on multiple-listing services at any given time. Some foreclosed homes aren’t listed because they are being offered as rentals, while others are awaiting repairs or are subject to litigation or other delays.

Some analysts expect a resurgence in foreclosed homes on the market later this year, as lenders pursue legal actions that had been delayed by moratoriums in various states that sought to keep more people in their houses.

The Zip data don’t cover New York City. But Miller Samuel Inc., an appraisal firm, reports that there were 8,644 cooperative apartments and condominiums on the market in Manhattan at the end of July. That was down 7.8% from June but up 6.9% from July 2008.

Write to James R. Hagerty at bob.hagerty@wsj.com