Inventories of homes, condos, townhouses, and co-ops shrank for the third month in a row in July, falling 1.2% from June and 17.6% from a year ago, to 2.31 million, according to the latest numbers from Realtor.com. Although shrinking inventories can be a positive sign, reflecting a rise in demand, it can also be a sign of volatility, as in some markets the decline in inventory is tied to a slowdown in foreclosures, restricting the