Not all is going smoothly with the housing recovery as the summer ends. August data from Realtor.com shows that, though inventories are still falling, more and more markets are seeing prices go in the wrong direction, dropping below levels of a year ago.

The total US for-sale inventory of single family homes, condos, townhomes and co-ops remained at historic lows, with 1.84 million units for sale in August, down 18.68 percent compared to a year ago and 40% below its peak of 3.10 million units in September 2007, when Realtor.com began monitoring these markets. While the median list price in August ($190,000) was down by 2.51 percent on a monthly basis, it remains essentially the same (+0.05 percent) as it was a year ago. The median age of the inventory in August was also down by -11.65 percent compared to August 2011.

On a year-over-year basis, August median list prices were up by 1 percent or more in 77 of 146 MSAs, and up by 5 percent or more in 41 MSAs. Median list prices were down by 1 percent or more in 31 markets, while nine experienced a decline of more than 5 percent. The remaining 38 markets have not experienced a significant change in their median list prices compared to a year ago. Realtor.com tracks 146 markets.

The numbers of markets reporting year over year price declines has been slowly growing in recent months. 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 among the highest rates of list price declines. This pattern continued in August.

The ten markets with the largest list price declines are: Peoria-Pekin, IL -10.35 percent; Charleston, WV -9.03 percent; Toledo, OH -8.61 percent; Fort Wayne, IN -6.83 percent; Trenton, NJ -5.66 percent; Milwaukee-Waukesha, WI -5.26 percent; Tyler, TX -5.06 percent; Chicago, IL -5.00 percent; Philadelphia, PA-NJ(NJ) -5.00 percent; and Allentown-Bethlehem-Easton, PA -4.81 percent.

These industrialized cities are not participating in the dramatic inventory declines that have been the driving force in the overall housing recovery. While inventories remain about 20 percent below last year on a national basis, none of the twenty markets with the greatest price declines reports an inventory reduction over 5 percent. In three of the top ten markets for price declines, Allentown, Fort Wayne and Charleston, inventories have actually increased.