The number of sales in the U.S. of properties in foreclosure continued to drop in the first quarter, with 18% fewer homes foreclosed upon when compared to the previous quarter. 

Down 22% from the first quarter of 2012, this year’s first quarter statistics show 190,121 sales of properties in some stage of foreclosure, according to real estate data firm RealtyTrac. The RealtyTrac report greatly mirrors the CoreLogic foreclosure report released a day earlier.

Foreclosure-related sales totaled 21% of all U.S. residential sales during the first quarter. This is down 25% year-over-year and a 45% drop from its peak in the first quarter of 2009.

Short sales equaled 15% of all residential sales, bringing the total share of distressed sales to 36% in the first quarter. The number of non-foreclosure short sales fell 10% from the previous quarter and 25% from a year earlier. 

"We expected foreclosure-related sales to be lower given the downward trend in new foreclosure activity nationwide over the past two and a half years, but the decrease in non-foreclosure short sales was a bit of surprise given the 11 million homeowners nationwide still underwater," said Daren Blomquist, vice president of RealtyTrac. 

According to Blomquist, home price appreciation in many markets is stunting the continued growth of short sales by reducing incentive for both underwater homeowners and lenders.

He added, "Underwater homeowners may be willing to stick it out a few more months or even years in the hope that they will be able to walk away with money at the closing table and without a hit to their credit rating, and for lenders a failed short sale may no longer translate into bigger losses down the road given that average prices of bank-owned homes are rising — at a faster pace than non-distressed home prices in many markets."

Georgia, Illinois and California had the largest percentage of foreclosure-related sales in the first quarter, with rates of 35%, 32% and 30%, respectively. Foreclosures in Massachusetts, New York and New Jersey equaled less than 10% of all sales. 

Nationwide, the average price of a foreclosure-related sale reached $167,095 in the first quarter, a 1% decrease from the previous quarter, but a 3% increase from a year ago. 

President of Prudential California Realty Rich Cosner says investors, who are typically paying in cash, at courthouse auctions, are purchasing most of the foreclosure properties.

Cosner noted, "Even investors at the courthouse auctions are bidding up the prices to the point that there is a greatly reduced opportunity to flip a property in a short period of time. Most of the investors today are buying the property, fixing it up and renting it out and hoping to have a great profit in three to five years."