When will my home be worth more?

Watch: Inventory
Current read: No recovery soon

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By Janice Revell, Money Magazine senior writer

Nationally, high inventory levels are signaling a long slog for the housing market. But what you care about are prices in your town, where conditions may be dramatically different.

What to watch: Locally, inventory is also the strongest price predictor, says Patrick Newport, a housing economist at Global Insight. Falling inventory - that is, fewer homes for sale - bodes well for prices. Rising inventory is a sign of more price cuts to come. Inventory in Phoenix, for example, has been rising consistently for the past year, while median prices have steadily fallen.

For a second opinion: While inventory represents the supply side of the market, the demand side of the housing equation is important too. For that, keep an eye on employment in your area.

More jobs means more fresh buyers. Reading the business section of your local paper is the best way to get a handle on job conditions in your city. Be on the lookout for big employers that are hiring - or downsizing.

To keep track: The National Association of Realtors publishes national inventory only. Your local association of realtors tracks it in your specific market, where it matters most. So ask your broker. As an alternative, go online. HousingTracker.net posts the change in inventory for more than 50 big markets.

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