The median price of a home dropped from $665,000 in November to $632,650 in December. That is down 7.3% from December 2010’s price of $679,000.

Inventory, the number of residential properties available on the first of the month, is also down from the previous month and down by 67% over the same month last year. But the bright news is that the number of properties sold in December is up by 26% over the same month last year. The number of properties in escrow on the first of the month is also up over the prior year.

The large number of sales can be a sign that buyer activity is increasing and coupled with the low inventory sellers can move properties if they do the right things.