Agents sold 705 residential units in 2012, up from 596 in 2011.
The year finished strongly, with home sales up 44 percent for the October to December period.
Monthly median prices held fairly steady. The median price of homes sold ranged from $163,150 in January to $183,900 in May. The median price settled at $172,500 in December.
Theresa McBee, president of the San Juan County Board of Realtors, said buyers seem to be more confident about the overall economy.
"Buyers are feeling better about their economics and the interest rates continue to be low, and they just get more buying power when they're low," she said.
With prices settling into some consistency, sellers are being more realistic about their expectations, said Sam Todd, broker-owner of Re/Max of Farmington.
"We really saw people adjusting those prices to where the market would sell those properties," he said.
Homes spent an average of 90 days on market in December 2012, down from 106 days a year earlier. Active listings dropped slightly to 493, down from 501 a year earlier.
The data from the San Juan County Board of Realtors counts only transactions involving a real estate agent. Homes sold by their owners are not included in the data.
Melanie Crawford, associate broker at ERA Four Corners Real Estate, said locals who kept their jobs throughout the downturn were ready to buy.
"People that have jobs weren't afraid," she said.
Crawford said she's seeing more families relocating to Farmington and renewed interest in commercial properties.
"I started getting a lot of calls on my commercial properties just in the last three months," she said.
Newer homes and homes around the median price are selling well, agents said. High-end homes tend to spend more time on the market and lost the most value during the downturn.
Nationally, the housing market is clearly improving. The national median existing-home price for all housing types was $180,800 in December, an 11.5 percent gain from December 2011. It was the 10th consecutive month of year-over-year price improvements.
In a prepared statement, Lawrence Yun, National Association of Realtors chief economist, said sales and price will continue to rise in 2013.
"Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales," he said.
According to Freddie Mac, the national average rate for 30-year mortgage was a record low 3.35 percent in December. It was 3.96 percent in December 2011.