Orlando's housing market in May had its thinnest inventory of available listings in almost three years, a new report shows.

More than anything, the area's real estate landscape in May was defined by scant listings with just 3.17 months of supply — about half of what is considered normal, according to Orlando Regional Realtor Association. The group reports on member sales mostly for Orange and Seminole counties.

“Orlando's inventory of available homes is 11 percent below where it was this time last year and continues to impact both sales and price,” says association president John Lazenby, an agent with Colony Realty Group Inc.

Typical of the summer buying season, both prices and sales were up in May, according to the association. The group reported 3,333 sales for the month, an increase of about 7 percent from a year earlier.

“… We are seeing a small trend of increasing sales that illustrates buyer enthusiasm for our current, historically low interest rates and steadily rising values.

Median prices in May tipped over the $200,000 mark for the first time since it had headed into a steep downswing in August 2008. The area's midpoint price of $203,000 in May was up 5 percent from a year earlier and more than 12 percent from a month earlier.

First-time buyers felt the pinch of rising prices more than anyone. The group, as a whole, had in income of $38,863 — just 14 percent more than they need to purchase what is considered a starter house with a price of $155,295, the association reported.

But those buyers and all others had little negotiating power, paying an average of 97.14 percent of the asking price in May — the tightest margin since February, sales records show.

Houses sat on the market an average of 67 days before landing a sales contract, the shortest period since August 2013.

Even though buyers were disadvantaged with fewer choices and higher prices, interest rates worked to their advantage. The average rate on a 30-year mortgage in May was 3.62 percent — down slightly from a month earlier and a year earlier.

mshanklin@tribune.com or 407-420-5538