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BY BILL FREEHLING

There are still many more houses available in the Fredericksburg area than people buying them, but the imbalance has improved every month this year.

There was a 10-month supply of houses actively listed on the market in the Fredericksburg area at the end of June, according to data from Metropolitan Regional Information Systems Inc.

That's still nearly double what officials from state and national Realtors associations consider to be a good balance between supply and demand. But it's a far cry from the 20-month inventory that existed in the local market this past January.

Those figures are calculated by dividing the number of houses listed at the end of the month by the number of sales. At the end of June, for example, 3,673 homes were listed in the Fredericksburg area, and 350 sold that month. At that pace of sales, it would take 10 months to clear the inventory.

Lisa Noon, a spokeswoman for the Virginia Association of Realtors, points out that the definition of a "healthy" ratio differs across the country. Walter Molony of the National Association of Realtors notes that sales rates should be adjusted seasonally, because sales fluctuate depending on the time of year.

Both agree that a six-month supply of houses is roughly normal. John McClain, deputy director of the Center for Regional Analysis at George Mason University, says a housing supply of between five and seven months was about normal before the market took off this decade.

The Fredericksburg area--which includes the city and the counties of Spotsylvania, Caroline, Stafford and King George--hasn't been at that "normal" level since the beginning of 2006, according to a review of MRIS data.

The inventory-to-sales ratio was at about 6 at the beginning of the decade before steadily decreasing as the market, fueled by low interest rates and easy credit, took off. The ratio stayed below 2 between March 2004 and June 2005.

Total dollar sales volume in the Fredericksburg area was $341 million in June 2005, a whopping 24.2 percent higher than any other month this decade. Although median prices peaked a year later at nearly $350,000, in terms of sales and inventory levels June 2005 can be considered the peak of the local housing boom.