It isn't the best of times, but there are signs that the worst of times in the Hall County real estate market may be nearing an end.

Frank Norton Jr. of the Norton Agency, a Gainesville-based real estate firm, calls the current situation "bouncing on the bottom."

Data from Metrostudies and Norton showed that completed but unsold new homes reached their lowest level in a year and a half during the second quarter of 2008.

There were 1,010 unsold new homes in Hall County in the quarter ending June 30, compared with 1,451 a year earlier.

Data from the First Multiple Listing Service showed there were 1,910 existing homes sold in July, compared to 2,201 in July 2007.

That's good news for agents like Sally Kirchner of Coldwell Banker Heritage Real Estate, who is one of the primary agents for Piedmont Place, a townhouse development of 17 residences priced from $270,000 to $395,000.

"Since May, we have seen much more activity," Kirchner said, adding that some of the interest has translated into closings.

"It's not like it was two years ago, but it's much better."

Norton, who studies real estate and economic trends, said Hall is faring better than the metro Atlanta average in terms of unsold residential homes.

"It's happening slowly, but it is dropping," Norton said. "Hall County is right at 10 months supply of new houses."

The metro average is 11.1 months supply. He said a more desirable supply would be around 7.5 months.

There is a much higher inventory of undeveloped residential building lots. In Hall County alone, there are 5,720 finished lots available. That number is the highest in two years.

Norton said his agency's July residential business was up 15 percent from July 2007.

"We are seeing more people qualify for loans and more people out looking in the market, whether it is resale or brand new, than we have in the past six months," Norton said.

The Village at Deaton Creek, an active adult community in South Hall, was the leading subdivision in the Atlanta market for the third quarter in a row, measured by closings, Norton said.

Norton said the data reflects all price ranges of homes. He said there is already a shortage of homes priced below $250,000 and a severe shortage below $200,000.

"It is unlikely that the development engine and the lending support will be very interested in developing any product at any price range for the next two quarters," he said.

He said the result will be a shortage of work force housing in Hall County in 2009, driving prices higher on homes in the lower price ranges.