Although local foreclosure numbers suggest otherwise, 2012 was a year of stabilization that is expected to continue into 2013.

The 1,320 foreclosures filed last year in St. Clair County and the 1,451 foreclosures filed a year ago in Madison counties increased from 2011 in each county, respectively, after both counties had recorded decreases in filings between 2011 and 2010.

However, the foreclosure crisis that has gripped the nation during the past five years has been easing. An online tracker of the nation's foreclosed real estate market reported that a level of certainty and stability returned to the U.S. housing market last year that could provide a solid foundation for 2013. In its forecast for the new year, Irvine, Calif.-based RealtyTrac predicts ongoing foreclosure activity will not pose a significant threat to the housing market's stability.

Illinois witnessed a 33 percent increase in foreclosure activity last year, the fifth-highest in the country behind New Jersey, Florida, Connecticut and Indiana. Exactly half of the nation, 25 states, including Illinois, witnessed a rise in foreclosure activity. But the nation's rate of foreclosure filings is expected to slowly descend this year.

Nationwide, foreclosure filings peaked at 2.9 million in 2010. RealtyTrac is forecasting a slow and gradual decline. However, more "normal" levels of foreclosure activity -- of around 500,000 filings a year -- are not expected until 2015.

"At least on a national basis, we expect to see numbers to continue to decline that determine foreclosures," said RealtyTrac Vice President Daren Blomquist. "It's still at the peak, but we're starting to see some states turn the corner."

In Glen Carbon, Greater Gateway Association of Realtors President and Chief Executive Officer Al Suguitan said states like Illinois, where the judicial system determines foreclosure, take more time the non-judicial states and hinder a quicker rebound in the market.

"Foreclosures have been higher in the past four, five years because the numbers have become prominent and have played an important role in keeping the market from reaching bottom and then starting to climb up," Suguitan said. "What we do with judicial foreclosures in Illinois has caused delays in the recovery."

Connie Stellhorn, President of the Realtor Association of Southwestern Illinois, said there are still a lot of foreclosures in the system throughout the state.

"The process may have started, but it just has not been completed," Stellhorn said. "We're still trying to go run that through our inventory."

By the third quarter of last year, the national average time to complete a foreclosure from the first public notice was 382 days, the highest since RealtyTrac began recording this statistic in 2007.

RealtyTrac is also forecasting a jump in bank repossessions early this year and a jump in foreclosure starts by the end of the year. Blomquist said the anticipated increase in bank repossessed properties will mostly be in judicial states, where lenders are still catching up with homeowners who have not made mortgage payments for years. Twenty of the 25 states that witnessed more foreclosure filings last year than the year before were judicial states.

"I think the caveat with that is the national numbers will continue to decrease, but we're still not going to be across the board in every state," Blomquist said. "Illinois is probably one of those states where at least in the first half of 2013 that foreclosure numbers will continue to increase."

RealtyTrac has reported that pre-foreclosure sales or "short sales" -- transactions that sell a home for less than the remaining mortgage balance, and the bank agrees to discount the original mortgage in exchange for a quick cash sale -- has been an efficient way to accomplish a smooth transition from a distressed market to a healthier one. This should continue into 2013 as about 12 million U.S. homeowners remain "underwater" as their home values have dropped below what they owe on their mortgages.

Suguitan said despite the increase in foreclosures filings in Madison County last year, the state of the metro-east housing market has improved.

"There are enough positive signals out there in the overall economy in the housing market that indicates that we're continuing on the road to a housing recovery," he said.

Stellhorn said there seems to be more sales activity throughout the metro-east area, but local foreclosure rates will take more time to fall.

"In talking with other brokers and other industry leaders, the phones are ringing more and there seems to be more optimism that we are headed in an upward trend," she said. "But foreclosures, I think, are going to be something that is going to follow us through the next year and will affect our market for a couple of years after that."

Contact reporter Will Buss at wbuss@bnd.com or 239-2526.