Many economists have their predictions for how the real estate market will perform in 2013, but one thing that is certain and that will likely play a large role is that there are a lot less available homes for sale.

We’ve already seen how this has affected the Bay Area, from hundreds of hopeful buyers lining up for a lotto to buy a new construction model home to prospective buyers creating designer love letters to sellers, telling their life story and how much they want to buy their home.

Real estate site Redfin pulled some stats, showing San Francisco and San Jose starting off the first two weeks of the year with nearly 50% less homes on the market compared to same time last year. Inventory is down all over the country, but it’s particularly worse in the Bay Area.

What’s the reason behind the low inventory?

The Wall Street Journal writes a good article on this, pointing to six reasons:

1. Many homeowners are underwater, and thus can’t sell.
2. Homeowners with equity in their home don’t have enough of it to “trade up” to buy a bigger and more expensive home.
3. Everyone wants to buy at the bottom, but few want to sell when they feel their home will be worth more next year.
4. Investors – from mom and pop and corporate investors have come out and become landlords, taking property that normally would be on the market into the rental realm.
5. With the foreclosure fiasco, banks have been slower at foreclosing homes.
6. There’s been a lot less construction of new homes by home builders.

Unless inventory starts picking up, this will make for a very interesting year for Bay Area real estate.

Article source: http://blog.sfgate.com/ontheblock/2013/01/23/2013-real-estate-kicks-off-with-inventory-crisis/