Inventory shortage continues to darken the skies over the housing market as the spring selling season approaches, ""Zillow"":http://www.zillow.com/ reported Thursday.[IMAGE]
Zillow observed a 16.6 percent year-over-year decline in its overall number of listed homes in late February, indicating an inventory crunch just as buyers start to feel more comfortable dipping their toes into the market.
Nationwide, the greatest year-over-year inventory declines were among more expensive homes, with the availability of top-tier properties falling 20.5 percent on an annual basis. That was followed by middle-tier homes (which saw a 17.2 percent inventory reduction) and bottom tier homes (9.1 percent).
Only five metro areas posted higher inventory in February 2013 than in February 2012: El Paso, Texas (18.5 percent higher); Albuquerque, New Mexico (8.1 percent); Little Rock, Arkansas (7.7 percent); Fort Myers, Florida (1.5 percent); and Youngstown, Ohio (0.2 percent).[COLUMN_BREAK]
Meanwhile, California's larger metros reported the greatest decreases in for-sale homes over the past year. Among the 30 largest metros covered by Zillow, four of the top five in inventory contraction call California home: Sacramento (down 48 percent); Los Angeles (down 45.7 percent); San Francisco (down 40.9 percent); and San Diego (down 39.4 percent). The outlier is Minneapolis-St. Paul, Minnesota, which saw a 36.7 percent drop in inventory.
""The supply of for-sale listings continues to dry up, driven in part by potential sellers trapped in negative equity and homeowners that won't sell out of fear they won't be able to find a suitable home to buy later,"" said Dr. Stan Humphries, Zillow's chief economist.
While inventory declined year-over-year in February, Zillow noted the drop was less severe than in January, which saw a 17.5 percent decline from the previous year. In addition, almost two-thirds of the areas surveyed showed a smaller year-over-year decline in for-sale homes in February than in January, which might indicate an easing in today's tight inventory.
Humphries expects the inventory issue will fix itself as rising prices coax sellers back into the market. However, this spring season may be a dry one.
""While this inventory is coming, it may still be a frustrating spring for buyers vying for what inventory is available,"" Humphries said.