Real estate that is in some stage of the foreclosure process oris already owned by financial institutions made up 31% of propertysales in the second quarter of this year, down from making up 36%of sales in the first quarter but up from being 24% of sales in thesecond quarter of last year.

The data comes from RealtyTrac, a leading market for foreclosedand distressed real estate.

The large slug of distressed and foreclosed properties continuedto drive down prices, the firm said. The average price of aforeclosed property in the second quarter was $164,217, down 1%from the average price in the first quarter and 5% less than theaverage price in the second quarter of last year.

These average prices were 32% lower than prices for real estatethat is not in foreclosure, the firm added.

But RealtyTrac CEO, James Saccacio, saw good news in thenumbers, pointing out they indicate that the market is starting todeal with the foreclosure stockpile.

“With average prices on distressed real estate trending down andaverage discounts trending up, this report is clearly good news forwell-positioned buyers and investors looking for bargain realestate that will build them wealth in the long term and often cashflow as rental real estate in the short term,” said Saccacio.“Maybeless evident, however, is the good news in this report fordistressed homeowners looking to sell, and even lenders saddledwith large portfolios of delinquent loans.”