In the second quarter of 2012, there were 986,355 completed home sales across the United States, according to RealtyTrac. Of those, 22.8% were “foreclosure sales,” which means that homes were either actively in default and in the foreclosure process, or the home already had been foreclosed and belonged to the bank at the time of the sale. While the average price of a nonforeclosure sale was $249,090, the average price of a foreclosure sale was $170,040, a 31.8% discount.

Read: Cities with the Most Homes in Foreclosure

Across the country, one in every 236 housing units received a foreclosure notice or moved forward in the foreclosure process in the second quarter of 2012, RealtyTrac notes. However, the rate was much higher in some areas, such as Riverside, Calif., where one in 68.3 homes are in foreclosure. 24/7 Wall St. reviewed the 10 metropolitan areas with the highest foreclosure rates.

Not surprising, home prices in the metropolitan areas with the highest foreclosure rates have fallen significantly since most of them peaked in 2006 or 2007. The home prices of all the metro areas on this list fell by more than the national average of 33.3% between the first quarters of 2007 and 2012. In five of the 10 metropolitan areas on this list, home prices declined by more than half during that time.

The metropolitan areas on this list are generally in states that have been especially hard hit by the housing downturn. All 10 are located in states that high rates of homes with underwater mortgages. Notably, three of the metropolitan areas are in the California while another three are in Florida. These states had the sixth- and second-highest rates of homes with underwater mortgages, respectively.

Places hard hit by the housing downturn also experienced higher levels of unemployment. As of May 2012, all but one of the metro areas on this list had an unemployment rate higher than the 8.2% national rate. Three of the metropolitan areas on the list had an unemployment rate above 10%. The high unemployment in these areas is serving as a barrier to housing recovery. Home prices in all 10 of these metro areas are expected to drop in 2012, with home prices in all but one of the metro areas expected to fall more than the U.S. decline of just under 1% this year.

24/7 Wall St. reviewed second quarter 2012 RealtyTrac data to determine the metro markets with at least a million residents and the highest foreclosures rates. Of those metro areas, we also reviewed average sale prices for homes, the number of homes in foreclosure and foreclosure sales figures. From Fiserv, we reviewed home price changes through first quarter 2012 and projections from that time. Because Fiserv and RealtyTrac use different geographies, some Fiserv metro areas were approximations, and are not identical sample sizes.

These are the 10 cities with the most homes in foreclosure.

10. San Diego-Carlsbad-San Marcos, Calif.
> Foreclosure rate: 1 in 137.3 housing units
> Avg. sale price (foreclosed homes): $316,515
> Avg. sale price (nonforeclosed homes): $448,985
> Foreclosure sales as pct. of total: 34.05%

In the second quarter of 2012, there were 13,931 home sales in the San Diego area. Of these, 34% were foreclosure sales — well above the national rate of 22.8%. The average foreclosed home sold at a 29.5% discount. Although home prices have declined by 39.6% since reaching peak value in the first quarter of 2006, the area’s housing market remains especially expensive. In the first quarter of 2012, the median home price in San Diego was 5.1 times the median family income, almost twice as much as the national figure of 2.6 times income. Even foreclosed homes are quite costly: a home that has been repossessed cost an average of $307,538 in the second quarter of 2012, more than $50,000 above the average price of nonforeclosed homes sold in the United States.

9. Tampa-St. Petersburg-Clearwater, Fla.
> Foreclosure rate: 1 in 119.8 housing units
> Avg. sale price (foreclosed homes): $96,543
> Avg. sale price (nonforeclosed homes): $129,819
> Foreclosure sales as pct. of total: 20.44%

As of the first quarter of 2012, home prices in Tampa-St. Petersburg-Clearwater area had fallen by 45.4% in the preceding five years, and were down 49.6% from their peak in the second quarter of 2006. Even worse, Fiserv projects home values to decline a further 3.1% through the first quarter of next year. Recent area data have not been positive: in the second quarter of 2012, the number of homes in foreclosure rose by more than 50% year-over-year from 7,506 to 11,295. As a result, 12.1% of all area homes sold in the second quarter of this year were preforeclosure sales. The average price on these 2,243 homes sold was $100,809.

Also Read: America’s Most Affordable Housing Markets

8. Miami-Fort Lauderdale-Pompano Beach, Fla.
> Foreclosure rate: 1 in 109.9 housing units
> Avg. sale price (foreclosed homes): $130,186
> Avg. sale price (nonforeclosed homes): $185,293
> Foreclosure sales as pct. of total: 23.16%

Miami had the most homes sold of any metro area in the second quarter of 2012, at 45,223. However, the Miami housing market has seen better days, as home prices were cut by 52.1% between the first quarter of 2007 and 2012. Worse yet, home prices are projected by Fiserv to continue to fall at an average of 1% annually through the first quarter of 2017. Despite the fact that prices are expected to fall further, demand remains for the discounted properties offered in foreclosure sales, which sold at an average discount of 29.8%. In the second quarter of 2012, one in every 22 foreclosure homes sold nationwide was in the Miami area.

7. Orlando-Kissimmee, Fla.
> Foreclosure rate: 1 in 100.8
> Avg. sale price (foreclosed homes): $114,684
> Avg. sale price (nonforeclosed homes): $140,630
> Foreclosure sales as pct. of total: 27.76%

Homeowners in the Orlando area were profoundly affected by the housing crisis, as home prices declined 52.2% from the first quarter of 2007 to the first quarter of 2012. The area’s housing market remains troubled — prices are again expected to decline 6.8% in 2012, while the number of homes in foreclosure was up 35% year-over-year in the second quarter. On average, a foreclosed home cost $114,684, an 18.4% discount to nonforeclosed properties. Prices on properties that had been repossessed were even lower, costing an average of $110,922, or a discount of 21.1% versus nonforeclosed properties.

6. Chicago-Naperville-Joliet, Ill.-Ind.-Wis.
> Foreclosure rate: 1 in 100.5 housing units
> Avg. sale price (foreclosed homes): $131,562
> Avg. sale price (nonforeclosed homes): $242,511
> Foreclosure sales as pct. of total: 30.21%

In the second quarter of 2012, 37,785 homes were in foreclosure, a 37.1% increase since last year. This is only good news for those looking to buy an inexpensive home. In the quarter, repossessed properties cost an average of $116,899, less than half the cost of a nonforeclosed home in the area. Additionally, the average home in foreclosure sold at a 45.8% discount to nonforeclosure homes, well in excess of the 31.7% nationwide average discount rate. Chicago homes are projected to be much more expensive in the next few years, as Fiserv projects home values to rise an annual average of 6.9% between the first quarters of 2012 and 2017.

5. Las Vegas-Paradise, Nev.
> Foreclosure rate: 1 in 95.9 housing units
> Avg. sale price (foreclosed homes): $122,987
> Avg. sale price (nonforeclosed homes): $145,079
> Foreclosure sales as pct. of total: 44.7%

The Las Vegas metro area has been crushed by the housing downturn with home prices falling 60.8% between the first quarter of 2007 and the same quarter in 2012, nearly double the national rate. Improvement is not on the horizon either, with home prices expected to fall an additional 7.9% in 2012 and 1.1% in 2013. Since home prices dropped so much in the region, a foreclosed home is not sold at as much of a discount as in other parts of the country. While the average home buyer in the U.S. can expect a 31.7% discount on a foreclosed home, a home buyer in the Las Vegas area can only expect a discount of 15.2%. To make matters worse, the Las Vegas May 2012 unemployment rate was 11.8%, well above the 8.2% national rate. This could hamper a strong housing recovery in the region.

Also Read: America’s 10 Disappearing Jobs

4. Phoenix-Mesa-Scottsdale, Ariz.
> Foreclosure rate: 1 in 92.1 housing units
> Avg. sale price (foreclosed homes): $144,235
> Avg. sale price (nonforeclosed homes): $191,263
> Foreclosure sales as pct. of total: 33.46%

After peaking in the second quarter of 2006, home prices in the Phoenix area fell by 52.7% through the first quarter of 2012. These huge price declines have made the area’s housing market very popular with homebuyers, who bought 39,531 homes in the second quarter of 2012, the third highest number of sales among all metro areas in the U.S. One third of these homes were foreclosed properties, selling at an average discount of 24.6% to the average price of homes not in foreclosure. Though foreclosed homes are already cheap, selling at less than the $170,040 nationwide average for such properties, area home prices are expected to fall by an additional 9.5% in 2012. In the first quarter the median mortgage payment in the area cost 11% of median family income, down from 28.4% when prices were at their peak.

3. Sacramento-Arden-Arcade-Roseville, Calif.
> Foreclosure rate: 1 in 90.3 housing units
> Avg. sale price (foreclosed homes): $185,565
> Avg. sale price (nonforeclosed homes): $251,888
> Foreclosure sales as pct. of total: 45.49%

Of the 13,327 home sales in the Sacramento metro area during the second quarter, 22% were repossessed properties, while another 23.4% were in the preforeclosure process. But the discount of 26.3% in buying a foreclosed home is slightly less than the 31.7% discount across the U.S. Sacramento’s unemployment rate of 10.8% as of May 2012 was far above the national rate of 8.2%, which could hinder housing growth in the near future. While home prices are expected to fall 2.2% in 2012, more than the national drop of just under 1%, prices are expected to rise by 8.1% in 2013, better than the 5% price growth expected across the country.

2. Atlanta-Sandy Springs-Marietta, Ga.
> Foreclosure rate: 1 in 87.6 housing units
> Avg. sale price (foreclosed homes): $106,042
> Avg. sale price (nonforeclosed homes): $181,952
> Foreclosure sales as pct. of total: 44.7%

With one of the nation’s highest foreclosure rates, it may not come as a shock that 44.7% of the homes sold in the Atlanta-Sandy Springs-Marietta area in the second quarter were foreclosed properties. Of these foreclosure sales, 7,814 were repossessed property — the most in the nation. One likely reason these properties were so popular was their price; the average foreclosed home could be purchased for $106,042 — a 41.7% discount to the price of a nonforeclosed home. Bank-owned homes were even less expensive; $100,220 on average — a 44.9% discount to the average sales price of nonforeclosed homes. Affordable property in the Atlanta area is not limited to foreclosed properties. After home prices fell 38% between the first quarter of 2007 and the first quarter of 2012, the area’s median mortgage payment cost just 7.3% of median family income — one of the smallest rates in the country.

1. Riverside-San Bernardino-Ontario, Calif.
> Foreclosure rate: 1 in 68.3 housing units
> Avg. sale price (foreclosed homes): $179,762
> Avg. sale price (nonforeclosed homes): $225,000
> Foreclosure sales as pct. of total: 47.23%

Of all home sales in Riverside-San Bernardino-Ontario in the quarter, 21.4% were sales of repossessed properties, much higher than the 11.9% nationwide. In addition, a whopping 25.9% of home sales in the second quarter of 2012 were preforeclosure sales, significantly higher than the 10.9% nationwide. It is not hard to see why: home prices dropped by 54.9% between the first quarter of 2007 and the first quarter of 2012, much faster than the 33.3% drop in home prices nationwide. Home prices in the area are expected to fall an additional 6.3% in 2012, well more than the 1% drop across the country. The high unemployment rate of 12.2% in the region as of May — well above the national rate of 8.2% — is likely to continue to burden the housing market for some time.

-Sam Weigley, Michael B. Sauter and Alexander E.M. Hess

Also Read: American Cities Losing the Most Jobs

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