TheBakersfieldCalifornian.com

Real estate experts are issuing year-end reports on the 2011 housing market, and by all accounts both the Bakersfield area and nation as a whole are on a heartening but agonizingly slow road to recovery.

Sales of existing homes in the Bakersfield area rose 3.2 percent to 7,019 from 2010 to 2011, compared with a 10.8 percent decline a year earlier, according to Gary Crabtree of Affiliated Appraisers in Bakersfield.

The median sale price for existing homes inched down 2.2 percent to $132,000 last year.

"Prices are pretty stable," Crabtree said. "I don't really expect prices to jump for any period of time until we can get the rest of these REOs washed through our market, and the whole country is that way."

REO stands for real estate-owned, which is industry jargon for foreclosed property that is owned by a lender.

Banks aren't in any hurry to unload their inventory of foreclosed properties, so that's going to take a while, said Mike Daniel, marketing director of real estate data firm Foreclosure Radar.

"They'd rather have them trickle down off the books slowly than dump them all out in a flood and depress prices," he said.

Then, too, a change in allowable accounting practices lets lenders take the loss on foreclosures at the end of the foreclosure process rather than the beginning, as was previously the case, which "de-incentivises the banks from actually foreclosing," Daniel said.

A startling number of homes in the Bakersfield market remains in the hands of lenders, but the figure is coming down.

Last year, 42.5 percent of closed sales involved foreclosed properties owned by lenders. That's almost half of all home sales here, but below 47.3 percent in 2010.

The number of homes foreclosed on in all of last year dropped 14.8 percent year-over-year to 6,131.

For some perspective, there were only 280 foreclosures in Kern in 2005.

"That was the height of buying time, when it was almost impossible to get foreclosed on because five minutes later you appraised the place and it was worth more," quipped Kern County Assistant Assessor Recorder Anthony Ansolabehere.

Nationally, the rate of foreclosures last year was the lowest since 2007, but it's expected to pick up again now that the "robo signing" scandal has largely passed, according to real estate data firm RealtyTrac.

A lot of lenders put a moratorium on foreclosures last year after some cases were illegally signed off on without proper verification or review.

A total of 1.89 million homes were in some phase of foreclosure in the United States last year, a 34 percent drop from a year earlier, according to RealtyTrac.

In another sign of the continuing fallout from the housing market crash, Kern County's short sales were up.

A short sale is a real estate transaction in which a lender agrees to let a residence sell for less than the balance of the mortgage.

There were 1,579 short sales in Kern last year, a 13.4 percent increase over 2010.

That could be read two ways.

On the upside, it's a good sign if it means more banks are willing to work with upside-down borrowers.

About half of all mortgaged homes in the Bakersfield area are under water, according to real estate data firm CoreLogic.

On the other hand, it's not healthy if a housing market is burdened with too many homeowners who owe more on their property than it's worth. Upside down homeowners can't sell and upgrade to a larger home, and are at higher risk for foreclosure.

In any event, overall supply is coming down, which helps keep home prices from plummeting as they did a few years ago when there was an inventory glut.

Listings of homes for sale in Kern fell 36.7 percent to 1,584 in 2011. In 2010, they rose 27.9 percent to 2,501.

There was a lot more activity on the existing home front than in the new construction market.

Builders have been grappling with shrinking profit margins as the cost of construction escalates because of new safety and energy efficiency mandates, Crabtree said. It's hard for builders to pass those costs on to customers when they're competing with sellers of deeply discounted older homes.

Building permits pulled in the county dropped 48.3 percent to 422 last year, compared with 816 permits in 2010.

Last year was, then, sort of a mixed bag, but the market is headed in the right direction, Crabtree said.

"It's not the most silver lining, but it's not all doom and gloom, either," he said.