The number of homes on the market remains high, as the housing crisis continues and the Spring selling season approaches its peak.

"Inventories in some cities may be topping out," said Michael Larson, a real estate analyst with Weiss Research. "But this shows that sales are still weak."

Even some markets that used to be considered bulletproof have seen inventories grow. Twelve months ago, Seattle had a fairly small number of homes for sale. But inventory there has since spiked 45.9% to 36,632.

The number of homes for sale in San Francisco rose 23.8% and Washington, D.C. inventory increased 18% over the same 12 months.

Chicago saw the biggest jump in inventory between March and April, with 82,000 homes listed for sale, up 5.9%.

And these bloated inventories have put pressure on home sellers to slash prices that have already been on a steep decline. In Orange County, Calif., 49.8% of homes on the market in early May have had prices reductions, according to the report. In Phoenix, 49% of the homes have lowered prices, and in Sacramento 48.8% of homes have been discounted.

Larson said, "There's been very aggressive pricing and increased incentives by builders. And banks taking back properties in foreclosure have also been very aggressive in selling those homes off again."

He adds that inventories may be peaking, if for no other reason than that far fewer new homes being built.

In January, 2006 new homes were coming on the market at an annually adjusted rate of 2.3 million units. The pace of new home construction has now fallen nearly 60% since then, to 947,000 a year.