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http://www.marinij.com/marinnews/ci_24952013/marin-homebuyers-struggle-dearth-homes-market

JOSH MORGAN and Tony Sananikone of Piedmont have been trying to buy a home in Marin for nearly a year, making offers on properties from Corte Madera to San Rafael, but their efforts have only resulted in "getting the pants beat off us," Morgan said.

Morgan is only one of many frustrated buyers caught in a two-year drought in the number of homes on the market. Experts cite the lack of foreclosed homes for sale, homeowners waiting for prices to go up even further and the scarcity of new home construction as causes, among other things.

The problem can be self-perpetuating, agents said.

"People hesitate to sell their homes because they don't know how they would fare when they become buyers," said Eric McFarland, an agent with Pacific Union. "Inventory is so low, when good properties come on the market it gets competitive, with multiple offers." So potential sellers don't list their homes, further limiting the number of homes for sale.

While the multiple-offer situation has eased in recent months, Morgan is all too familiar with multiple bidding from other buyers competing for the same place.

"A house went on the market in San Rafael for $1,300,000. We offered $1,425,000, but there were 10 other offers, and it went for $1,650,000," said Morgan, who is a banker.

In December 2010, there were 952 homes on the market in Marin. By December 2013, the number was down to 283, a 70 percent drop, according to data from Bay Area Real Estate Information Services, a multiple listing service.

There were 2.3 months of inventory available in December 2013, meaning that if no new homes went up for sale, it would take just a little more than two months to sell every home on the market. Normal inventory in Marin is about four months' worth.

"In the fourth quarter of 2010, 25 percent of all the properties for sale in Marin were in contract," said Patti Cohn, an agent with Pacific Union. "In the fourth quarter of 2013, it was 52 percent. The percentage of all homes on the market that sold was 28 percent back then, versus 60 percent now."

One of the reasons for the low supply could be that "homeowners may simply be hoping that house prices will continue to rise, allowing them to recover lost equity," said John Krainer, a senior economist in the economic research department of the Federal Reserve Bank of San Francisco.

"It is well-documented that house price changes are persistent," meaning that price rises are likely to be followed by more rises, Krainer said. Those homeowners who don't have to sell right away "can potentially take advantage of this. They may want to wait and gamble that the increases will continue, allowing them to sell later at a higher price."

Data collected in April 2013 by real estate sites Zillow and Corelogic shows a correlation, with the phenomenon, "though not necessarily causation," Krainer said.

"Counties that experienced large increases in house prices over the past year also experienced relatively large declines in inventories available for sale," Krainer said. The median price in Marin zoomed by as much as 26 percent month-over-month in 2013.

A local agent echoed Krainer's analysis.

"I think people are just hoping if they wait a little bit longer that their home will be worth a little more," said Alva Falla, an agent with Coldwell Banker.

Another factor:…..

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