A San Diego-based real estate firm released a report last week showing that home sales in the Bay Area suffered a slide of 23 percent last month following the withdrawal of the federal home buyer tax credit that experts said further dampened the enthusiasm of prospective buyers.

In spite of the prevailing low interest rates, MDA DataQuick analyst Andrew LePage said that the huge decline didn’t come as a surprise for the industry as the federal assistance for first home buyers started winding down.

LePage, however, admitted that the substantial retreat was somewhat disturbing as experts were only anticipating a seasonal two-fold fall for the months of June and July, yet home sales dipped by almost three-fold.

DataQuick said that home sales plunged by 22.8 percent in July when 6,773 homes were traded as compared to the figures posted on the corresponding period while single-family home sales also went down by 22.5 percent to 5,104.

On the other hand, real estate inventory seemed to be picking up amidst the lowering demand as real estate agents observed that housing supplies climbed by almost twice the numbers since December last year.

Glen Bell of Keller Williams Realty said that in Alameda and Contra Costa counties alone, inventories jumped to a 3.5 month supply in July coming from the December supply of 1.7 months’ worth of home sales.

However, Keller Williams said that despite the mounting supplies, buyers were not taking the plunge as broker Kevin Kieffer noted that they were taking their sweet time and possibly hoping that the government may throw in new incentives and prices would slide further.

LePage said that the current trend of a growing inventory being met with lukewarm demand should lead to an industry price correction in which home prices would be pushed into ‘double dip’, where prices would be marked down anew.

Experts clarified though that double dip would only hit properties in the middle to high-end range but not the low-end real estates where price ranges on that segment were already considered as bargain, fetching tags from under $300,000 to under $500,000.

Meantime, the high-end property market may be immune from double dip for now but recent developments were pointing to the likelihood that foreclosure incidents may be creeping into the vaunted segment.

A three-bedroom Mediterranean home in Berkeley Hills was inspected by real estate agent Jaima Roberts on Thursday last week and she could only hope that a buyer would be willing to shell out $899,000 required by the bank for a new owner to occupy the foreclosed property sitting right into the million-dollar homes circle.

Roberts explained that buyers were having second thoughts for many reasons as she stressed that price is not the main problem but the way people regard the property market at this time.

She could only guess that most buyers maybe assuming that “prices will drop again or they’re afraid of what they read in the paper, but they’re not buying.”