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Spring is the time house hunters expect to see a slew of listings. But in many parts of the country, inventory is pretty low. When that happens, home prices go up. WSHU's Kaomi Goetz takes a look at the housing market. She checked out a listing that led to a history-making home sale in Connecticut.
KAOMI GOETZ, BYLINE: Realtor David Ogilvy is talking about Copper Beach Farm in Greenwich, Connecticut, via YouTube.
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GOETZ: It's a 51-acre estate once owned by Carnegie Steel heiress Harriet Lauder Greenway. It just broke the record for the highest home sale price in American history, at a stunning $120 million.
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GOETZ: There's a stone and shingle mansion with two towers, 12 bedrooms and 10 fireplaces, sweeping views of Long Island Sound. But perhaps what drove the price is its potential.
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GOETZ: The buyer's identity isn't known, and it's not clear if the estate will get chopped up. But the 120 million mega-sale caps off a run on pricey homes here. Six homes have already sold in town for over $10 million each this year. Local Realtor Brad Hvolbeck says the long winter slog and the recession have created a frenzy of pent-up demand.
BRAD HVOLBECK: I put a house on yesterday for 2.4 million. I showed it twice today, and I have two more showings tomorrow. So you can see, the market has really jumped quite a bit.
GOETZ: That demand is driving up home prices pretty much everywhere. On Tuesday, the National Association of Realtors said the price of a typical home rose nearly 8 percent compared with last year. One key factor is low inventory. Back in 2009, you could have your pick of places. The market was flooded with foreclosed homes; prices went into a free fall. But those homes have now been bought up or torn down. The recession also put a credit squeeze on builders; some even went bust.
Patrick Newport is an economist with forecasting firm IHS. He says new housing starts are still about a third below where they should be because builders are still running into difficulties.
PATRICK NEWPORT: These include things like higher labor costs, higher construction costs, difficulty getting credit.
GOETZ: So this spring, new home prices are surging at a time when mortgage rates are also rising. On Wednesday, the Commerce Department said the price of newly built homes shot up, but sales dropped more than 14 percent last month. With fewer homes on the market, good deals are in short supply. That's what's frustrating new home buyers David Bleckley and his wife. They began shopping for their first home in Ann Arbor, Michigan, this year. Michigan, remember, was one of the hardest-hit states in the foreclosure crisis. Bleckley was hoping to still find a bargain, maybe a fixer-upper. They're too late.
DAVID BLECKLEY: Things have really bounced back lately. I think that 2013 would have been a much better time to buy a house, but we weren't here yet.
GOETZ: Eventually, higher prices may encourage more homeowners to list. When that happens, buyers will have more choices and then the market can finally heal. For NPR News, I'm Kaomi Goetz. Transcript provided by NPR, Copyright NPR.