The rise in the number of homes for sale in California, to its highest level in a year, is not the good news it first appears. The increase is due to a drop in home sales, rather than a rise in listings. Instead of reflecting improved liquidity in the market, rising inventory instead points to the increasing difficulty sellers are having in finding qualified buyers. In turn, that suggests the recent stagnation in housing market activity will continue, even if the improvement in Californian inventory is repeated elsewhere.
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