5 best and 5 worst places to buy foreclosures

5th-best: Lakeland, Fla.

RealtyTrac Vice President Daren Blomquist says Florida's seesawing housing market — which boomed in the early 2000s, then went bust around 2007 — hit Tampa so hard that the downturn spilled over to Lakeland, a 590,000-population metro area around 35 miles away.

"A lot of times, 'exurban' communities around a really hot area are very affected by a boom and bust," he says. "There's a lot of homebuilding in such places during the boom, but then there's an oversupply of houses when the bust hits."

As a result, Lakeland — best known as the Detroit Tigers' spring-training home — saw foreclosure filings rise 95.7% during 2012.

Distressed properties accounted for a quarter of all homes sold there during the January-to-October period, and RealtyTrac found the area has a 34-month glut of foreclosures on the market.

Blomquist attributes much of the backlog to Florida's strict judicial-foreclosure rules. RealtyTrac found that the average Sunshine State foreclosure finalized during 2012's fourth quarter took 853 days to complete — more than double the 414-day national average.

Of course, that means Lakeland-area foreclosure buyers enjoyed a 28.05% average discount during 2012's first 10 months, according to RealtyTrac. Blomquist expects similar bargains in 2013.

• Realtor.com: Find Lakeland homes for sale

4th-best: New York City

The Big Apple offered buyers a ripe and juicy 40.4% average discount on foreclosed properties in 2012's first 10 months, and RealtyTrac expects such deals to continue or even improve this year.

That's because the metro area — which includes Long Island, the city's northern suburbs and parts of New Jersey and Pennsylvania — has a 97-month backlog of foreclosed properties on the market.

Again, blame for the excess inventory goes to the state's lengthy foreclosure proceedings. RealtyTrac found that New York state home seizures finalized during the fourth quarter took 1,089 days on average from start to finish — the longest process in America.

"New York courts have been particularly aggressive in not letting lenders foreclose unless they have all the proper documentation in place," Blomquist says.

• Realtor.com: Find New York homes for sale

• Video: Have foreclosures peaked?

• 'Listed': Report: Lenders wrongfully foreclosed on over 700 service members

3rd-best: Albany/Schenectady, N.Y.

New York state's capital suffers from the same long foreclosure process and distressed-property backlog that's hitting Gotham, according to Blomquist.

RealtyTrac found that Albany has an 86-month supply of seized homes on the market – and saw foreclosure filings soar 107.7% in 2012.

All told, foreclosure buyers in this 871,000-population metro area about 120 miles north of New York City got a 35% average price break during 2012's first 10 months. RealtyTrac predicts more of the same in 2013.

• Realtor.com: Find Albany homes for sale

• Video: What are 'zombie foreclosures'?

• MSN Money: 9 ways the government bungled the foreclosure crisis

2nd-best: Rochester, N.Y.

This city 325 miles northwest of New York City along Lake Ontario saw foreclosure filings rise 132.6% last year, leaving Rochester with a 78-month supply of unsold distressed homes.

Again, Blomquist blames New York state's arduous foreclosure process. "There's a big backlog of cases," he says.

The good news for would-be buyers: People who bought distressed properties in the 1.1-million-person metro area between January and October 2012 saw 25.8% average discounts. Blomquist sees such deals continuing this year.

• Realtor.com: Find Rochester homes for sale

• Video: Foreclosure filings hit lowest point since 2007

• On our blog, 'Listed': Foreclosed-home discount cut in half

• Bing: Foreclosure activity by ZIP code

Best: Palm Bay/Melbourne/Titusville, Fla.

This metro area along the Atlantic coast is home to the Kennedy Space Center — which is fitting, because its market soared toward the moon during the housing boom, then fell back to Earth in the bust.

"You have still the leftover wreckage from the housing bubble — bad loans, a slow foreclosure process and lots of people who are 'underwater,'" Blomquist says.

The Kennedy center has also cut thousands of jobs in the past year or so after the space-shuttle program's termination, adding to the 540,000-population area's problems. "A soft underlying job market only aggravates [the Palm Bay region's] foreclosure problems," Blomquist says.

RealtyTrac says local foreclosure activity rose a whopping 308.7% last year, with foreclosures accounting for 23.8% of all property sales in the first 10 months. The site also estimates the region has a 34-month supply of distressed properties.

Of course, that means foreclosure buyers enjoyed a 28% average discount during 2012's first 10 months — bargains that RealtyTrac expects to see repeated in 2013.

• Realtor.com: Find Palm Bay homes for sale

5th-worst: Salt Lake City

Speculators priced out of California and Arizona markets bid Salt Lake City's home prices way up during the housing bubble, but Utah's nonjudicial-foreclosure laws have helped the metro area recover relatively quickly from the bust that followed.

Salt Lake's foreclosure-related filings fell 37.7% in 2012, leaving the 1.1-million-person metro area with just 19 months of unsold foreclosures on the market — one month less than the U.S. average. As a result, the typical Salt Lake City foreclosure buyer got only a 13.4% discount in 2012 — way below the 31.6% national average.

"We've seen the numbers come down in Salt Lake City in the past year because of the state's more streamlined foreclosure process," Blomquist says.

• Realtor.com: Find Salt Lake City homes for sale

• Video: Have foreclosures peaked?

• 'Listed': Report: Lenders wrongfully foreclosed on over 700 service members

4th-worst: Las Vegas

Long the poster child for the U.S. housing boom and the bust that followed, Las Vegas is seeing a major turnaround in its housing market, with prices rebounding and foreclosure filings way down.

"Las Vegas is a market that has been organically able to bottom out more quickly because of [Nevada's] fast foreclosure process," Blomquist says. "Many of the foreclosures that had to happen there have already happened."

He adds that a 2011 law change that made the state's nonjudicial-foreclosure process a little harder for banks took effect only after many Vegas home seizures. As a result, the measure has only dried up Sin City's backlog of unsold distressed homes further.

Foreclosure-related filings fell 57% in Las Vegas during 2012, leaving the metro area with only a seven-month supply of available foreclosures, one of the lowest rates for any U.S. city.

All told, distressed-home buyers enjoyed just a 16.8% average discount in 2012 in the 2-million-person metro region.

• Realtor.com: Find Las Vegas homes for sale

• Video: What are 'zombie foreclosures'?

• MSN Money: 9 ways the government bungled the foreclosure crisis

3rd-worst: Little Rock, Ark.

The one-time home of former President Bill Clinton saw foreclosure-related filings plunge 48.6% in 2012, but Blomquist says that might be only a temporary reprieve.

He says Little Rock's foreclosure crisis abated mostly because of a November 2011 court ruling that slowed Arkansas home seizures. "The drop in foreclosures is really the result of the court's intervention rather than a natural decrease in activity," Blomquist says. "It's reduced foreclosures in the state for now, but that might not be the end of the story. Lenders are still trying to figure out how to proceed."

For now, Little Rock's glut of unsold foreclosures has dropped to a 15-month supply. That's partly why the typical foreclosure buyer in the 710,000-person metro area got only a 24.3% discount in 2012 — well below the national average.

• Realtor.com: Find Little Rock homes for sale

• Video: Foreclosure filings hit lowest point since 2007

• On our blog, 'Listed': Foreclosed-home discount cut in half

• Bing: Foreclosure activity by ZIP code

2nd-worst: Ogden, Utah

Ogden has seen its foreclosure crisis ease in tandem with improving conditions in Salt Lake City, about 40 miles to the south.

Foreclosure-related filings dropped by 50.1% last year in Ogden, leaving the 547,000-population metro area with just a 13-month supply of seized properties up for resale. As a result, the average Ogden foreclosure buyer got only a 14.7% discount last year.

Blomquist attributes Ogden's bottoming out to Utah's speedy nonjudicial-foreclosure process.

However, he adds that the average Ogden home-seizure case finalized during 2012's fourth quarter took 449 days to complete — up 96 days from three months earlier.

Blomquist isn't sure what's behind the increase, but calls it "a warning flag. It means there could be more foreclosures hitting the resale market down the pike."

• Realtor.com: Find Ogden homes for sale

• Video: Have foreclosures peaked?

• 'Listed': Report: Lenders wrongfully foreclosed on over 700 service members

Worst: McAllen, Texas

This Texas city along the border with Mexico never saw big home-price gains during America's real-estate boom, so it didn't suffer as much in the resulting bust. Add in Texas' fastest-in-the-nation home-seizure process and you have foreclosure conditions that are good for current owners, but terrible for would-be buyers.

Foreclosure filings in McAllen fell 66% during 2012, leaving the 775,000-population area with only a 12-month supply of distressed homes available for purchase. That means the typical McAllen foreclosure sold for just a 21.5% discount in 2012 — well below the U.S. average.

"There are definitely markets in Texas that still have foreclosure problems," Blomquist says, "but few are dealing with the huge numbers of [distressed properties] that we saw elsewhere in America."

• Realtor.com: Find McAllen homes for sale

• Video: What are 'zombie foreclosures'?

• MSN Money: 9 ways the government bungled the foreclosure crisis