Only half of many homes in America are listed for sale compared to the height of the housing boom in 2006 while median list prices are about the same as they were a year ago.

The size of the inventory declined steadily in 2012, with the number of for-sale properties in December roughly 50 percent below the levels observed at the height of the housing crisis. The national for-sale inventory continued to decline in December, falling by -6.51 percent over the month and by -17.32 percent on an annual basis. The large year-over-year decline in the for-sale inventory is a positive sign that the market has worked through much of its excess inventory, which should help to bolster housing prices and potentially set the stage for additional growth.

However, while list prices also increased significantly over the first half of the year, they have declined in recent months, with the median list price in December now roughly the same as it was one year ago. In addition, a growing number of housing markets-primarily in older industrialized areas-are registering year-over-year list price declines, according to December data from Realtor.com

These potentially off-setting trends suggest that house price appreciation in the upcoming year is likely to be more moderate than it was in 2012. The median list price in December ($187,900) was essentially the same as it was a year ago despite the significant gains that occurred earlier in the year, when the median list price rose to as high as $195,000 in June 2012.

On a year-over-year basis, December median list prices were up by 1 percent or more in 66 of 146 MSAs, and up by 5 percent or more in 49 MSAs. Median list prices were down by 1 percent or more in 49 markets, while 14 experienced a decline of more than 5 percent. The remaining 31 markets have not experienced significant changes in their median list price compared to a year ago.

Over the past few months, the number of markets experiencing year-over-year price declines has steadily increased, while the number experiencing list price increases has steadily declined. In fact, compared to one year ago, the number of markets ending the year with a year-over-year price decline has more than doubled (49 in December 2012 vs. 20 in December 2011) and a significantly lower number of markets have a year-over-year price increase (66 in December 2012 vs.101 in December 2011).

California markets continue to dominate the list of areas experiencing the largest year-over-year increases in their median list prices. In addition, Phoenix, AZ, Atlanta GA, and Seattle, WA are among the top performers. The 10 markets with the largest year-over-year list price increase are shown below. All but one of these markets (Phoenix) experienced year-over-year declines in their for-sale inventories of -20 percent or more, while six of these markets had inventory declines of 40 percent or more.

For more than a year, older industrialized markets that never experienced the rapid run-up in prices that led up to the housing crisis have been registering the highest rates of list price declines. This pattern continued in December. While Jersey City and Chicago had year-over-year inventory declines of -31 percent and -22 percent respectively, most of the remaining areas experienced inventory declines that were well-below the national average (-17 percent).

The median age of inventory of for sale listings was 111 days in December, up by 9.90 percet from November, but -9.01 percent below the median age one year ago (December 2011). While the median age of the inventory is highly seasonal, the year-over-year decline is consistent with other data showing a general tightening of market conditions over the year.