Home sales dropped 12 percent in North Texas last month.

Even with the decline, overall prices eked out a 1 percent gain from a year ago.

A median priced home sold for $154,000 in May – the highest price since last summer.

More than 7,700 pre-owned single-family homes in North Texas were sold last month, according to statistics released Monday by the North Texas Real Estate Information Systems and Texas A&M University's Real Estate Center.

Through the first five months of 2008, pre-owned home sales have fallen 14 percent in North Texas.

Median home prices are down 2 percent through May compared with the same period of last year.

The most positive economic news from the latest local housing data is that the number of homes for sale has fallen.

At the end of May, there were 44,910 pre-owned homes on the market – 10 percent less than a year ago. May's decline in inventory follows several months of smaller decreases from last year.

The decline in inventory is good news for North Texas and comes as the number of homes for sale is soaring in many U.S. markets.

The drop in homes on the market here "shows the market is still relatively strong and that the sales season hasn't seen much slippage," said Dr. James Gaines, an economist with Texas A&M University's Real Estate Center.

"Let's wait a while to proclaim the worst is over and see how things go," he said, "but I do agree it's a positive sign."

Real estate agents say that the supply of unsold homes on the market varies significantly by neighborhood.

"There is lot of inventory on the market in certain price ranges," said Mary Frances Burleson, president of Ebby Halliday Realtors. "But this is not a Las Vegas or Miami.

"We had a very good April and May, and people are still buying."

It's still taking longer to sell houses in North Texas. The average was 79 days in May, 14 percent longer than a year ago.

Currently there is just over a seven-month supply of pre-owned homes for sale in North Texas.

And don't expect an increase in completed home sales in the weeks ahead. The number of pending home purchases at the end of May was down 28 percent from a year earlier.