Economists, like other voodoo practicitoners, have a number of trusted signals which help them make forecasts. But the housing crash cracked a lot of crystal balls in the past few years, and many are left wondering if one of the old reliable indicators, a decline in housing inventory, is still a good sign.

The decline is clear across the country, with overall inventory down 16.9 percent in September across 54 metro areas, according to real estate data collector HousingTracker.com. In Massachusetts, year-over-year inventory numbers were down 1.7 percent in July and 5.3 percent in August, according to the Massachusetts Association of Realtors. Combine that with a bump in sales –The Warren Group, publisher of Banker & Tradesman, recently reported a year-over-year statewide sales increase of 15.8 percent in August – and it might add up to a good omen.

Recently, the respected housing and economics blog Calculated Risk – one of the first to call the bubble, back when it was still inflating – pointed out that if trends continue “pretty soon we will be talking about inventory being at the lowest level since 2005.”

The spike in inventory in that year was one of the first signs of the bubble bursting, as the pool of buyers began to dry up.

‘A Good Property Issue’

Declining inventory levels, then, could be a sign that there’s finally more buyers out there than sellers, a signal that prices are nearing bottom and that the new normal might finally be starting be a bit more like the old normal, at least when it comes to the housing market.

And that may be true in some segments. Brokers and agents paint a picture of a market on a precipice, with desirable properties receiving multiple competitive bids while those in need of renovations or in less desirable locations continue to languish.

“Here, it’s not a distressed property issue, it’s a good property issue, in that we just don’t have enough good properties to sell,” said Jon Goode, manager of Coldwell Banker Residential Brokerage’s South End office in Boston. “When we get something really nice on the market, it’ll end up having competitive bids, which totally dismays the buyers out there who think that we’re in a buyer’s market. That’s the conflict that we have here in the city, trying to tell our buyers that.”

More suburban locations see a similar pattern, though at a different price point. According to MaryBeth Muldowney, president of TradeWinds Realty Group in Plymouth, listings around $300,000 disappear from the market very quickly in her area.

“The shortage that we’re seeing is in nice, first-time homebuyer properties,” she said. Such homes are popular not only with young couples but also with older empty-nesters looking to downsize.

Hiding In The Shadows

But there remains one big unknown when it comes to a housing recovery: What banks will do with the millions of distressed properties lingering on their books – the dreaded “shadow inventory” – and when they’ll do it. Along with the drop in inventory, there was renewed evidence this summer of increased foreclosure activity, with bank foreclosure filings increasing in several states.

Locally, banks filled 1,441 petitions in July and 1,397 in August, the highest numbers since last September, when the robo-signing scandal broke and many lenders imposed foreclosure slowdowns and moratoriums while they cleaned up their processes.

More foreclosure starts inevitably leads to more foreclosures, and as more distressed and discounted property comes onto the market, prices will likely be dragged lower. That’s enough to keep some would-be sellers stuck.

“People definitely want to move – I have a quite a few families I sold homes to six [or] seven years ago [who want to move] but can’t price where the bank-owned are, and therefore wouldn’t have the equity to move up,” Muldowney said.

That kind of reluctance can be hard to overcome.

“You’ve got the trifecta – low rates, low inventory and the fall market,” which is typically slower than the spring, said Joe Schutt, an agent with Sotheby’s International Realty in Boston.

The fear of declining home prices has infected many, even in areas like Massachusetts where prices haven’t fallen as significantly in the past couple of years as in other hard-hit markets. After hitting a recent low of $285,000 in 2009, median single-family home prices in Massachusetts rebounded to $295,000 last year and stood at $296,000 through August, according to The Warren Group.

“I tell people all the time – you’re not in Nevada, Arizona, California,” says Schutt. “We’ve been a stable market.”