New data released Thursday indicates the Dayton-area housing market’s recovery from widespread foreclosures is gaining strength.

Fewer foreclosed or distressed properties were sold in Montgomery, Miami, Greene and Preble counties during the first quarter when compared to the same period last year, and the ones that were sold fetched higher prices on average, RealtyTrac Inc. said.

During the first three months of this year, 165 area homes in the foreclosure process were sold for an average price of $81,078. In the first quarter of 2012, 504 area homes in some stage of foreclosure were sold for an average price of $63,962, the RealtyTrac figures show.

The 27 percent increase in average sale price for these homes was one of the biggest increases in the nation, RealtyTrac said.

Foreclosure-related sales include properties that have received a default notice, been scheduled for auction or are bank-owned.

Distressed home sales comprised 19.4 percent of all home sales in the Dayton market from January to March, according to RealtyTrac’s estimates. Irvine, Calif.-based RealtyTrac is a for-profit firm for foreclosure listings.

Fewer distressed sales are good for the overall housing market because distressed sales drag down home values, RealtyTrac spokesman Daren Blomquist said.

Moreover, prices in most places across the country have bottomed out and are increasing, so the foreclosure sales that do occur don’t have as much of a negative impact on values as they did in recent years, Blomquist said.

“We’ve gotten through most of the toxic loans that triggered the foreclosure crisis in the first place,” Blomquist said. Many homeowners remain underwater, owing more on their mortgage than the property is worth, but “rising home prices are helping to rescue at-risk homeowners from foreclosure. They’re more likely to have equity, which gives them a lifeline to other options rather than just foreclosure, such as sale of a home or refinancing.”

“Last year we saw an increased willingness on the part of the lenders to approve short sales on homes as an alternative to foreclosure, so that helps to basically drain the pool of potential foreclosures,” Blomquist added. A short sale is when the homeowner and the lender agree to sell the home for less than the remaining debt.

The share of foreclosure sales on the market nationwide are still high above 20 percent. In a normal market, distressed properties represent less than 5 percent of all home sales, Blomquist said.

Although the area housing market is recovering, estimates are it will still take years for local home prices to fully recover to pre-recession levels.

The Dayton Area Board of Realtors previously reported the Dayton area’s average sale price of an existing home increased 5.6 percent in 2012 from 2011, the greatest annual percentage increase since the late 1990s.

Meanwhile, new foreclosure activity dropped to a decade low in 2012. Last year a total 5,316 new foreclosure cases were filed against property owners in Greene, Miami, Montgomery and Preble counties, with the majority in Montgomery.

The Federal Reserve Bank of Cleveland research released earlier this year also showed the delinquency rate on Ohio mortgages has declined to 8 percent from about 10 percent in 2009.

“Those are all good signs. We’re not there yet, but it’s a good beginning,” said Michael Royce, a local real estate agent in the business for 35 years who specializes in distressed properties. He is broker/owner of Harrison Twp. firm Royce & Associates. “It’ll be a while before we get the values that we used to have.”

“I guarantee there’s more foreclosures and short sales in the city of Dayton than there are in the suburbs,” Royce said. “I would say short sales, foreclosures — they’re still plentiful, but there’s less of them.”

Cincinnati, Cleveland, Columbus and the entire state recorded a higher number of foreclosure-related sales in the first quarter at lower prices. Ohio was one of 12 states to see more foreclosed or distressed homes sold over the last year, according to RealtyTrac.

The number of U.S. homes sold in some stage of foreclosure declined 22 percent year-over-year from one in four properties a year ago, to one in five properties the first quarter of 2013, RealtyTrac said.