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