foreclosures and budget deficits in Wisconsin.

Not being an economist, I'm wondering if this article is reporting the health of our Wisconsin economy in a good way or a bad way? I realize that people leaving their homes is a bad thing for the families. I also realize that a real estate "bubble - burst" is a necessary type of cycle in a well functioning economy. There is a seemingly unrelated headline that follows however..

From Friday's news:

MADISON (AP) - Buyers got better deals on distressed properties in Wisconsin during the first quarter compared with the national average.
A company that tracks foreclosures across the country, Realtytrac, says Wisconsin buyers saved about 32 percent on homes that were in some state of foreclosure, including default, scheduled for auction or bank-owned. The average discount nationwide during the same time period was 27 percent.
Nearly 1,800 foreclosure-related sales took place in the first quarter in Wisconsin with an average price of about $109,000. link to article

MADISON (AP) - The Legislature's top fiscal analyst is warning the state faces a $2.5 billion shortfall in the two-year budget that starts next year.
Bob Lang, director of the Legislative Fiscal Bureau, said the general fund will be an estimated $2.51 billion short of the revenue needed to meet current spending commitments.
That means the next governor and Legislature will be required to make deep spending and service cuts, pass fee and tax increases or do a combination of the two to balance the budget. link to article