McALLEN — The Hidalgo County housing market is showing signs that is has finally stabilized, according to data from the first five months of this year.

The county's home sales were down more than 26 percent in May from a year earlier. And foreclosed homes continue to enter the market every month, at a rate of more than 10 percent of the homes that are for sale.

But the situation isn't getting worse. For most of the year, sales have actually remained relatively stable, albeit at lower levels than before, as have foreclosures, according to data from the Real Estate Center at Texas A&M University.

"Sales were down considerably, but that's happening everywhere, all around the country, all around the state," said Jim Gaines, a researcher with the center. "The other good news is that the inventory has dropped."

The oversupply of houses for sale has depressed home prices and saddled the Hidalgo County market for years, but recently the supply has fallen more in line with demand, Gaines said. In January, at the rate of sales then, it would have taken 13.2 months to sell all the homes on the market.

But by May, that number had fallen to 12.7 months. Nationally, the sought-after rate is close to seven months. Here in the Rio Grande Valley, Gaines said, it's probably closer to 10 months.

Still, home sales are down and the median price of the homes being sold is lower than it was last year. Prices and sales activity are most depressed in parts of the Valley that had high rates of subprime lending, said Dick Henry, president of the Greater McAllen Association of Realtors.

"The marketplace is kind of like the weather - it's spotty," Henry said. "You have pockets of McAllen that are very strong and certain areas that are dead."

The median sales price of homes in Hidalgo County increased $5,600 from January through May, a further sign the market is stabilizing.

On average, though, homes in the county were worth 3.6 percent less in May this year than they were during their values' peak in May 2008, according to the latest data from the Texas A&M Real Estate Center.

Still, it's not easy to sell a home. Financing is available but can still be difficult to find. And with recessionary woes hurting pocketbooks, there are fewer buyers.

"You can no longer just sit on your duff and put a sign in the yard and hope it sells," Charles Marina, a Realtor with First American Realty, said recently. "You've got to do what you're trained to do and market a property."

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Sean Gaffney covers business, the economy and general assignments for The Monitor. He can be reached at (956) 683-4434.