The good news is the number of homes that went through foreclosure in the Phoenix area tumbled 16% in 2011, but the bad news is home prices still took a significant hit, according to year-end housing numbers from the W.P. Carey School of Business at Arizona State University.

Foreclosures completed in the year fell to 35,855 from 41,625 in 2010. The amount of foreclosures as a percentage of overall housing transactions also improved, dropping to 34% in 2011, down from 39% in 2010.

Home prices, however, failed to regain traction in the Phoenix metro area, with the median sales price hitting $125,000 in 2011, down 10.4% from $138,000 a year earlier. The median price for a townhouse or condominium resold in 2011 was $79,000, also down more than 10% from $88,000 in 2010.

“Although 2011 ended on a slightly more positive note than 2010, there are several issues, including a weak economic recovery and stricter mortgage underwriting guidelines playing a role here,” said Professor Emeritus Jay Butler, author of the business school’s foreclosure report.

“The main question for 2012 is whether homeowner-occupants will play an expanding role. We’re starting to see investors getting very involved again, and many have shifted from buying foreclosed homes to actually attending foreclosure auctions.”

Write to Kerri Panchuk.