Residential real estate in Bend and Redmond began 2014 shaking off the lingering effects of the recession, but in both cities, the market finished with year-over-year increases in median prices and significant declines in short sales.

The median price of a single-family home increased nearly 8 percent in Bend from 2013 to 2014 and about 12 percent in Redmond, according to figures from the Central Oregon Association of Realtors.

Short sales, in which the property is sold for less than the amount owed, declined 62 percent in Bend year over year and 67 percent in Redmond, the figures show. Bank-owned sales, essentially sales of foreclosed properties, dropped 4 percent in Bend from 2013 to 2014 but increased nearly 37 percent in Redmond.

Scott Halligan, Central Oregon Association of Realtors board president, said short and bank-owned sales — collectively known as distressed sales — drive down home prices.

Fewer distressed sales allow prices to rise and bring the market closer to normal. A shortage of homes for sale, especially in Bend, has also pushed up prices.

However, home construction has picked up, he said. Interest rates remain low, and the federal government recently started programs to help first-time homebuyers.

“I think we’re going to see a healthy market,” Halligan said.