Local Realtor Carol Engler believes the Yuma-area housing market is over the worst of the real estate crash and prices will start to rebound.

Her observation is borne out by a recent report by 24/7 Wall St. that has identified the 10 metropolitan areas where home prices are projected to increase the most by next year. Yuma is among them.

However, since most of those markets have experienced exceptionally large drops in home prices, the revival is bittersweet. But those drops also tend to draw in investors, bringing an inflow of new money to revive the market.

The 24/7 Wall St. report said of Yuma that it “has fallen on difficult times, economically speaking. The metropolitan area has an unemployment rate of 26.3 percent — the second highest in the country. Housing prices in the area have decreased 11 percent in the past 12 months and 36.2 percent since the fourth quarter of 2006.”

On the positive side, the report predicted the Yuma market will bounce back with a 9.5 percent increase in prices from the second quarter of 2011 to the same period in 2012.

That’s the third-largest price gain over the next 12 months of the 10 metropolitan areas listed by the report. Yuma’s gains are expected to continue into the next year with an expected 9.4 percent increase in home prices between the second quarter of 2012 and the second quarter of 2013.

Other cities where home prices are expected to increase the most by next year are Mobile, Ala. (6.2 percent); Syracuse, N.Y. (7 percent); Las Cruces, N.M. (7.4 percent); Niles-Benton Harbor, Mich. (7.5 percent); St. George, Utah (7.9 percent); Farmington, N.M. (8.3 percent); Yuba City, Calif. (9.2 percent); Carson City, Nev. (15.5 percent); and Madera-Chowchilla, Calif. (15.5 percent).

Many larger cities, such as Las Vegas, Nev., and Riverside, Calif., that were also hit exceptionally hard by the housing crisis are not expected to recover in the coming year.

The metro areas projected to recover have slightly more than 100,000 residents, for the most part. “As a result, housing inventories are much smaller,” the report said. “It is much easier to turn around a housing market on this scale than on a much larger one.”

24/7 Wall St. used data from Fiserv for 384 metropolitan areas to compile its list.

On the other hand, 24/7 Wall St. identified 10 housing markets it expects to collapse this year, dropping in price by another 11.1 to 16.6 percent. Seven of the 10 cities are in Florida or California. Neighboring El Centro is among them, with an expected price drop of another 12.1 percent in addition to what it already has suffered with the real estate slump.

As for Yuma, Engler said, “People talk about dropping prices, but they’re comparing them to 2005 to 2007.”

However, today’s prices are in line with what they were earlier in the decade before the real estate bubble, she said. “The years 2005 to 2007 were the anomaly … the exception, not the rule.”

Yuma County’s average sales price for a home in the second quarter of this year was $143,327, according to the Yuma County Assessor’s Office. The second quarter of 2004, the average sales price was $145, 269.

The third quarter of this year, the price had declined slightly to $134,432, dipping below the 2004 third quarter price of 143,003.

“Prices go up and down,” Engler said. “Values fluctuate.”

But she suggests now is the time for people to buy if they’re intending to because of interest rates that have been as low as 3.9 percent. Over the life of a 30-year mortgage, that will save homeowners a lot of money whether or not they manage to shave a few dollars off the purchase price, she noted.

That’s a message more prospective homebuyers are taking to heart, she said. “People are getting several good offers on a property. I recently sold a house to an executive at Yuma Regional Medical Center. There were 10 offers on the house, and it’s not just this property. I’ve heard repeated stories of multiple offers.”

She also noted that from Nov. 22, 2010, to this Nov. 22, 2111, there were 1,914 closed sales on the Yuma Association of Realtors Multiple Listing Service, compared with 1,811 closed sales during the same period the previous year.

Paul Shedal of Yuma Stats offered a more conservative view of the market. “My take is that the residential market had been trying to level throughout 2011 until August. At that point, foreclosure activity (and bankruptcies), that had been resolving, began climbing back to higher 2010 levels.

“That return to last year’s level has been ongoing from August through the end of October, indicating no slackening of inventory for at least the coming six to 12 months. With supply still forecast to remain high, there’s no incentive for prices to rise.”

Shedal reported that there have been 620 actual foreclosures through October of this year. In all of 2010, there were 931.

Nor is there much residential building activity. According to Yuma Stats, Yuma County issued 86 permits for single homes through October, a 2.27 decline from the previous year. In the city of Yuma, 101 housing permits were issued, down 33.11 percent from last year. Somerton and San Luis, Ariz., also saw a big decline in housing activity.

One problem is the banks, Engler said, relating horror story after story of homeowners trying to make a deal with their bank, only to have their homes repossessed.

She knew of a deal to sell a home for $115,000. The bank put it on the market for $39,900.

In another case, a man was working three jobs to keep up with the payments on his mortgage of $190,000; in today’s market the house was valued at $95,000.

“The homeowner asked the bank to modify his loan to $125,000 and reduce his payments,” Engler said. “The bank wouldn’t do it and sold it in a short sale for $95,000.”

In a third case, Engler said she had a house in escrow for $190,000 for a short sale. “The bank foreclosed and sold it for $158,000 in a trustee sale.”

Homeowners lose their homes and credit ratings, the bank loses money, and the short sales or trustee sales continue to keep housing prices depressed, she noted.

In spite of the banks, though, Engler sees cause for optimism the market is turning around.

In fact, she’s firmly convinced “it is still a great market. I made more money the first 10 months of 2011 than I did in all of 2010.” That includes the sale of a home on Camino Real for $775,000.

“Yuma’s values are still good and will eventually get better.”

Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853. Find her on Facebook at Facebook.com/jlobeck or on Twitter at @YSJoyceLobeck.