More than 50 percent fewer home sales closed on Mercer Island last month, compared to October 2010, per the latest statistics from the Northwest MLS.

With single family and condominiums combined, 14 properties changed hands last month on the Island, compared to 32 a year ago. The number of pending sales — mutually agreed offers that have not closed — was 28, the same as October 2010. Overall median price fell from $722,000 a year ago to $550,000 last month.

The good news is inventory is down. There are 124 homes/condos on the market now, compared to 189 a year ago — a drop of 34.39 percent.

“It’s been happening since May, and now it’s dropping off even more,” said John Deely, broker at Coldwell Banker Bain in Seattle. “This trend is really indicative of our whole market in the Pacific Northwest.”

Deely said seasonal adjustments where inventory drops off at the end of the year is typical, and year end is actually a good time for sellers to put their homes on the market.

“They’ll have less competition,” he said.

Breaking out single family, closings were down 60 percent from 25 a year ago in October, to just 10 last month.

However, median single family price was up 35.15 percent from $825,000 a year ago to $1,115,000 last month. Only four condominiums closed on the Island compared to seven in October of 2010, but those prices were up, too, from a median of $252,000 a year ago to $359,750 last month.

Deely explained the reason for median price overall trending down, where the median price for single family homes and condominiums individually was up, is because the data set for condominiums is only based on four units.

“You take that whole subset and add them to residential, and it pulls the middle of the residential units down,” he said.

Deely said he hardly ever combines residential and condominiums on the Island because there are so few condo sales.

There are only 16 condos for sale on the Island, compared to 39 a year ago. Five condominiums went under contract last month, compared to three last year at this time.

Median price aside, according to Residentialseattle.com, the highest price sale on the Island was a home at 4270 Holly Lane that closed Oct. 26, at a price of $6,125,000.

Prices were down almost 11 percent areawide in the NWMLS system, compared to a year ago.

In a press release, NWMLS director Frank Wilson said, “What is holding back the housing market has little to do with houses.”

He said it has more to do with uncertainty in the stock market, volatile global economies, and lack of job creation.

It doesn’t help, either, that the ceiling for jumbo loans dropped. Buyers in need of a mortgage above $506,000 must now qualify for a jumbo loan, which is more restrictive and carries a higher interest rate than a conventional loan. The previous limit on jumbo loans was $567,500.

According to NWMLS, in King County, nearly one-third of the available inventory is priced above the more restrictive loan limit.

Deely said the fact is, there are a lot of buyers looking around, and few listings.