The median single-family home price in Middle Tennessee dropped last month to $157,500, the lowest price since 2005.

“For months we were approaching a bottom in prices, but I think the rubber has met the road. I think we’re there now,” said Dwight O’Neal, owner of Nashville-based Realty Trust.

By all accounts, home buyers have taken notice.

January’s 1,116 single-family homes sold in the nine counties covered by the Greater Nashville Association of Realtors marked the best January in four years.

Kendra Cooke, the association’s president, said the nimble sales were partially attributable to a “vibrant” first-time homebuyer marketplace, spurring more affordable homes to sell and pushing down the average sticker price.

Furthermore, the association trumpeted the sales tally as an “encouraging start to the year.”

Last month’s single-family home sales jumped 21 percent from the year-earlier levels, though the total remains some 200 sales away from the January 2008 level.

Single-family home inventory shrunk 13 percent from January 2010, but 10,971 homes remain on the market, a few thousand away from healthier levels, real estate experts said.

Still, Realtors said stringent lending standards and still-recovering consumer confidence are lingering in Middle Tennessee, despite the improved sales.

“Home prices will start going up once we finally burn off more inventory,” O’Neal said. “I think that switch has flipped, and people are buying homes again.”

Condo sales, meanwhile, increased 22 percent from last January and the median condo price was $140,325 — up nearly 7 percent from a year earlier.

Reach Bobby Allyn at 615-726-5990 or ballyn@tennessean.com; Follow on Twitter @tnbiz.