TAMPA - Homes in some stage of foreclosure made up 43 percent of Hillsborough County home sales during the first quarter.

That's more than any other Bay area county, according to a new report released Wednesday from Calif.-based RealtyTrac, which tracks foreclosures.

In the Tampa-St. Petersburg-Clearwater metro area, 33 percent of sales were distressed properties, the report showed.

Of local counties, Hernando had the next-worst showing with 40 percent of sales. Pasco had 30 percent, and Pinellas had 26 percent.

Every Bay area, except for Pasco County, had a larger percentage of foreclosure sales in the first quarter than in the fourth quarter of last year. Pasco's share of foreclosure sales dropped slightly.

So what does this mean? Well, it depends, real estate professionals say, on how you look at it.

On one hand, it's a good thing that foreclosure homes are getting new owners, so fewer homes sit vacant. In some cases, it means lenders are approving more short sales, allowing troubled homeowners to avoid foreclosure by selling the home for less than they owe.

But on the flip side, the foreclosure sales drag down prices. Bay area homes that are either in the process of foreclosure or bank-owned sold for an average sales price of $121,721 in the first quarter. That's an estimated 19 percent discount, compared to similar homes that aren't in foreclosure.

"First time homebuyers and investors continue to buy foreclosure properties in large numbers, and at substantial discounts," said James J. Saccacio, chief executive officer of RealtyTrac. "As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they will manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deterioration."

Foreclosure homes in Hillsborough County saw the largest discount, 25 percent.

In contrast, it didn't make much of a difference in the sales price in Pasco County, where the average sales price was $114,794, a discount of just 1 percent.

Hernando County's average sales price was the lowest among the counties, at $93,252, a 13 percent discount. Pinellas county foreclosure homes sold at a 19 percent discount, for an average sales price of $128,119.

Nationally, foreclosure homes accounted for 31 percent of all sales in the first quarter, and the average sales price of those properties was nearly 27 percent below the average sales price of properties not in the foreclosure process.

Reporter Shannon Behnken can be reached at (813) 259-7804