BUYING A HOME: Seasonal Flip-Flop Hallmarks Housing Recovery, Tough Times For First-Time Buyers

Just as home price gains are moving up against the traditional seasonal grain, inventories are going down at a time when they typically turn up.

A new report by Movoto.comreveals the housing inventory is down to its lowest point in three years.And that's bad news for homebuyers, especially first-timerstrying to take the plunge.

Across Movoto's 34-city tracking area, inventories of homes for sale in January dropped to 88,000, down 19 percent from December and 47 percent off the 2010 peak.

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Meanwhile the monthly list price per square foot increased from $169 in December to $173 in January, $155 a year ago and $162 two years ago.

By Movoto's measure, homes on the market today are more expensive they they've been for the past two years.

Graphs by Movoto Real Estate

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Among the top 10 major metros with the greatest year-over-year drop in inventories, 7 are in California.

The top 10 cities in Movoto's coverage area with the greatest decline in homes for sale, along with the decline by percentage, are:

Sacramento - 75.11 percent
Oakland - 66.77 percent
San Francisco - 61.41 percent
Long Beach - 56.19 percent
San Diego - 49.34 percent
Los Angeles - 48.68 percent
Fresno - 47.62 percent
Portland - 43.18 percent
Denver - 39.02 percent
Houston - 35.02 percent

Movoto says inventories are inadequate for a host of reasons and those reasons are squeezing first-time home buyers out of the market.

• Equity is on empty - With insufficient equity to sell homes at a profit, homeowners are sitting tight. Only those who are struggling and unable to get a workout are forced to sell - at a loss. Until the market returns sufficient equity to these homeowners, they are going nowhere fast.

• Catch 22 - Homeowners who can sell at a profit are afraid they won't be able to purchase a decent move-up, -over, or -down home.

"Remember standing around at the high school dance wondering who's going to be first to ask

a girl to dance?," asks Movoto.

• Banks are cranky - Contrary to other reports, Movoto says, just like underwater homeowners, banks are keeping foreclosures off the market until they can make a profit on higher prices. Lenders are also doling out loan modifications and short sales to otherwise cover their assets.

• Upper end homes dominate - What homes are for sale are being sold by homeowners who purchased their homes a decade or more ago and still have equity to burn. First timers can't afford these higher priced homes.

• Competition from investors - Investors, private equity companies and others have already scraped the bottom - in bulk. Since the bust, investors acquired many foreclosures and distressed properties and, like banks, are holding them as rentals or fixing them up to resell later for a profit.

Also, investors come to the table with cash and can bid up prices. Homebuyers come to the table with a fixed mortgage amount.

First-time home buyers have a tough time competing with investment moguls.

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