Arizona's housing recovery is real and sustainable, a new national report says.

Foreclosures in Pima County continued to drop, with 2013 first-quarter figures reaching the lowest level in five years.

There were 1,017 foreclosures in the first three months of the year, compared with 1,342 during that time frame in 2012, data from the Pima County Recorder's Office show.

While Arizona continues to rank among the top states in the country for foreclosures, they are falling nationwide.

Arizona, Nevada, Illinois, Ohio, New Jersey, Georgia and Florida lead the nation in foreclosure activity, says the RealtyTrac U.S. Foreclosure Market Report that was released Thursday.

Nationwide, foreclosure actions were taken on 152,500 U.S. homeowners in March, the report said. That's a decrease of 23 percent from March 2012.

In Arizona, more than 45,000 homes are in some stage of foreclosure, the report said.

The state's market is definitely on the mend, said Daren Blomquist, RealtyTrac's vice president.

"We see Arizona in a more positive light," he said. "There's not a concern about shadow inventory of foreclosures on the horizon. What you see is what you get."

In some states, such as Florida and Nevada, long foreclosure processes could result in a new round of foreclosures in coming months because they can take more than a year to settle.

"Nationwide, foreclosures will continue to fall, but we are still going to see some flare-ups," Blomquist said. "It's not going to be all good news, but things are slowly getting better."

RealtyTrac reports that at the end of March, there were about 1.5 million homes in some stage of foreclosure. That's down from the peak of 2.2 million in December 2010.

The majority of the Arizona home loans in default - 74 percent - originated between 2003 and 2008, Blomquist said. Nationwide, 75 percent of distressed home loans originated during that time frame.

"This is not new distress," he said.

Blomquist said the new homebuilding activity in Arizona is not a concern the way it is in other markets where the recovery is not as evident.

"I know homebuilders are being conservative," Blomquist said. "In the last five years, foreclosures were the competition for homebuilders, so they stopped building.

"Now, a lot of the newer properties have been picked over, and the homebuilders are not as concerned about competing with that."

The overall housing market in Pima County continues its steady recovery, the latest figures from the Tucson Association of Realtors Multiple Listing Service show.

Unit sales increased nearly 40 percent in March to 1,329, versus 951 in February.

The average sale price in March was up 2.9 percent from February to $191,881. That's a 13.3 percent increase over the average sale price in March 2012.

Contact reporter Gabriela Rico at or 573-4232.