The median home price in Pierce County held steady in May at $225,000 instead of dipping slightly as it has in recent months, according to figures released Thursday by the Northwest Multiple Listing Service.

And the year-over-year declines seem to be slowing. Though the median home price was down 13.4 percent compared with last May, the decline was less than the 14.5 percent decrease in April.

Dick Beeson, a broker with Windermere and a Northwest MLS director, said a two-month flattening out in the home price doesn�t necessarily mean rock bottom � or that prices can only go up from here.

�I think we�re going to bounce along the bottom for a while,� Beeson said, though he does see prices beginning to stabilize in some areas.

Pending sales � homes where offers have been made but the sales haven�t closed � were up 23 percent. The number of closed sales for the month was down slightly compared with May 2008.

Beeson said there are some early indicators that a steadier market could be on its way.

There are nearly 30 percent fewer homes on the market this May than the same month in 2008.

Though that means smaller selection for prospective buyers. Local real estate analyst Al Morken said the decrease is an indicator of an improving market. �Too much inventory is the killer of the market,� he said. �When people have fewer options, it makes them pay more attention.�

The number of Pierce County homes for sale has stayed about 6,000 for the past couple months. Morken said the smaller inventory compared with last year will help push homes that have been sitting to sell.

Though it�s a positive sign, Morken said it could still be a long road to a healthy market, especially with a large number of foreclosures still in process.

And with an $8,000 tax credit and historically low interest rates in pocket, first-time homebuyers are still the main group buying up the lower-priced inventory.

Marguerite Giguere, a broker with Crescent Realty specializing in homes for less than $300,000, said nine out of her 10 clients are young, first-time buyers.

What are they buying?

�Everybody�s different. Everybody starts out thinking they want some crazy fixer-upper foreclosure, and once they go to a couple of those and smell those � they change their minds,� she said.

Justin Leighton, 27, was tempted by the buyer-friendly market in March to relaunch the hunt for his first home purchase.

A science teacher at Fife High School, Leighton said he never thought he�d land a four-bedroom, 2,000-square-foot Hilltop house for just under $200,000. He�ll close next week on the almost new home, which sold for $313,000 a year ago before its foreclosure.

�It was a goal to buy a house by the time I�m 30, so I reached that goal three years before,� Leighton said. �If the markets weren�t as bad as they were, it would not be an option to buy.�

With a roommate, he�ll pay just $100 more for his mortgage than he did for rent at his apartment, not to mention the $8,000 federal tax credit that will be on its way.

Beeson said low interest rates � 5 percent for Leighton�s mortgage � are another incentive for buyers to take advantage of the more affordable home prices.

Morken, who maintains an affordability index that compares the average home price to the average income in the county, said monthly house payments are beginning to reach a healthy equilibrium at about 30 percent of a person�s monthly income, or a total price of three times a person�s yearly income.

He said homeowners were paying up to five times their annual income during the market bubble�s peak.

�Prices have to reach an equilibrium,� he said. �When our median price was $286,000, that just isn�t affordable in our blue-collar world.�

Whitney Coleman: 253-597-8546

whitney.coleman@thenewstribune.com