As real estate inventory falls and buyers grab up distressed homes within days of hitting the market, area Realtors are cautiously optimistic that things are looking up.

The 36-month inventory of homes that were for sale a year ago is down to an 18-month supply and median home prices in parts of Sarasota County rose $6,000 in April, according to Bill Geller, president of the Sarasota Association of Realtors. In healthier times, the ideal inventory of homes is six-to-nine months.

Meanwhile, pending sales have increased nationwide as have condo sales.

"I'm not downplaying the crisis but these are encouraging signs," said Curt Mellon, a Realtor with Home Choice Real Estate in Punta Gorda. "Most of our listings are already pending. Our inventory has shrunk."

Mellon cites a bank-owned home in North Port with three bedrooms, two baths and a pool which listed for $112,000 and drew 27 bids in three days.

"It's frustrating for buyers but little glimmers of hope for sellers," Mellon said.

Distressed sales in April represented almost half the homes and condos sold in Punta Gorda, Port Charlotte and North Port. The remaining homes -- 269 -- sold without extenuating circumstances.

The trick to selling homes that are not in distress? They have to be priced right, look right and be in the right location, Realtors say.

In Sarasota County, 60 percent of homes are being sold without extenuating circumstances.

"If you price it on the competitive side, which is the lower side of the range, then it sells quicker," Geller said.

Some distressed homes are selling at 50 percent, 60 percent or even greater discounts, skewing the overall market.

Take distressed sales out of the equation and prices appear to be leveling off, Geller said.

Cynthia Logan has been overrun with offers as a Realtor with Coldwell Banker Sunstar Realty In Punta Gorda. Logan is president of the MLS Association of Realtors for Punta Gorda, Port Charlotte and North Port.

Fully foreclosed homes under $200,000 are selling fastest and banks are accepting aggressive prices on short sales, though the latter are still holding up the marketplace, she said.

Homes with multiple bidders are selling above the listing price.

"The biggest problem now is convincing buyers it's OK to pay more than the list price," Mellon said. "Especially on foreclosures."

The number of buyers interested in lower-priced homes is heavily weighted with investors and second-home buyers.

But first-time buyers who plan to occupy homes are taking advantage of VA and FHA programs that allow low or no down payments.

Realtors are getting the word out about an $8,000 first-time-home-buyer tax credit signed into law recently in Florida.

"It's very encouraging to see people who can buy for the first time," Logan said.

Phillip Wilson deals with "arms length" transactions -- no foreclosures and short sales -- as a Realtor and auctioneer with Wilson Realty and Real Estate Auctions in Port Charlotte.

The company sold 10 homes last year by auction, and some sold for more than expected.

"People think things are going to get worse," Wilson said. "Those days of the perfect investment are almost gone. People don't realize it; all of a sudden, the supply is going to dwindle and prices are going to go up. "

His message: Buy now.

Logan agrees. With stimulus bills being signed, "you're going to see an explosion," she said.

David Schnulle works for D.R. Horton at River Club in Port Charlotte. This newer development came out of the ground two years ago with 78 homes now occupied. Twelve homes are under construction and eight sold in the last month.

Priced from $119,000, new homes in River Club are trending toward smaller floor plans and fewer upgrades as opposed to the larger, more lavish homes built in the first wave of construction.

"We have been very busy," Schnulle said. "New construction is moving very well."

For those with bad credit, this is not the end of the road, Logan said.

"When I get people who want to get back in a home, I turn them over to a financial advisor who really has a heart for it," she said.

By DANA SANCHEZ, Assistant Englewood Editor

E-mail: dsanchez@sun-herald.com