The number of distressed properties available has been declining for some time now. They are less of a factor in our market place here in the East Bay. As of the end of April, foreclosures amounted to only 6% of the homes for sale in Alameda and Contra Costa counties. That's slightly over 100 homes for the 38 cities that I track. This decline has been a contributing factor in the rise of median prices compared to last years numbers. Distressed properties typically are lower priced homes and so with the change in the mix (less distressed and more equity listings) it factors into the median price increase.
Back to your original question. Our MLS has the ability to look for homes that are REOs (foreclosed homes) that are listed. Your agent will be able to conduct a search in areas for homes along with that and other criteria requested.
Ask your agent for a market update and to start sending you candidates that meet your criteria in your home search.