The Triangle housing market continued to show modest signs of improvement in August, with sales increasing 23 percent over the same period a year ago.

It was the second consecutive month that sales have risen by double digits. They increased 10 percent in July.

Some improvement was expected late this summer given that the federal homebuyer tax credits expired in June of last year. That caused an immediate drop-of in activity.

"If our closings were flat, below, or only up a percent or two up from last August that would be a troublesome sign for the market," said Stacey Anfindsen, a Cary appraiser who analyzes Triangle Multiple Listing Services data for area real estate agents.

"I'm very encouraged. When you're coming out of an incentive-based market one of the things you want to see is a market returning back to normal."

There were 1,581 homes sold in Durham, Johnston, Orange and Wake counties in August. Pending sales were up 51 percent and showings declined 1percent.

Despite the improved numbers, a sizable number of homes continue to languish on the market.

The average days on the market for homes that sold in August was 122 days. That's 18 days more than last August, and 34 days longer than two years ago.

Part of the problem continues to be a limited number of people with the financial wherewithal to buy. A growing number of sales now occurring involve all-cash buyers.

In August, 289 of the recorded sales in the Triangle were cash deals, a 35 percent increase over the same period a year ago.

The rising days-on-the-market statistics also reflect the fact that many homes on the market continue to be overpriced, said Jason Graves, a broker and listing partner with Linda Craft & Team Realtors in Raleigh.

"If you get your price right, I have had two transactions just in the past two weeks with multiple offers," he said.

While some sellers are simply unwilling to capitulate on price, others are unable. They bought homes during the peak of the market and now owe more money than their house is currently worth.

Graves estimated that about a third of the 76 active listings being handled by Linda Craft & Team are distressed sellers in some form.

Further complicating the picture is the so-called shadow inventory, which refers to the properties that have been taken back by banks after being foreclosed.

Although the Triangle has seen fewer foreclosures than other harder hit areas of the country, Graves said the banks his firm deals with have indicated that there is still a considerable amount of inventory that the banks have yet to dispense with.

"I think we're going to see a lot of that kind of bouncing along the bottom for the next year or two," he said.