Looking to Buy Foreclosures? Know Where to Look

by on Foreclosures

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If you are an investor or potential homebuyer looking for incredibly discounted properties, then you are more than likely looking for foreclosures (or other distressed properties). Although these homes often require some minor to moderate renovations before you can place them back on the market – or live in them comfortably – distressed properties provide some great opportunities for buying a home below market value.

Over the last few years, foreclosures have been relatively easy to find. In fact, in most areas the foreclosure rate and housing inventory has been much higher than housing demand. Fortunately, this trend has changed and investors and consumers alike are gaining confidence. As a result, it has become increasingly harder to find discounted properties on the current real estate market – as the inventory is falling and demand is quickly rising.

In fact, foreclosure activity was down 21% in December 2012 in comparison to December 2011. Furthermore, foreclosure activity fell 10% from November to December. This information shows that the real estate market is well on its way toward recovery and that foreclosures are (and will continue to be) harder to find.

In the current real estate market the key to finding foreclosures is knowing where to look. Some areas of the country are recovering quicker than others and therefore finding foreclosures can be more difficult. At the same time, other areas are recovering slower (especially judicial foreclosure states) and therefore you can find distressed properties in these areas easier.

So where, exactly, should you be looking?

Look to States with High Foreclosure Activity

When searching for foreclosure deals and discounted properties, it is essential that you look at the states that still have high foreclosure activity. Therefore, the best thing to do is to take a look at the states with the highest foreclosure activity in December 2012.

The top 5 states with a high foreclosure rates are as follows:

  • Florida – 1:338 homes in foreclosure
  • Nevada – 1:345 homes in foreclosure
  • California – 1:457 homes in foreclosure
  • Illinois – 1:461 homes in foreclosure
  • Ohio – 1:473 homes in foreclosure

In fact, according to CNN, several of the great foreclosure deals that are currently on the market are within these five states. Therefore, if you are looking to invest in foreclosures, then you may want to start your search by looking to Florida, Nevada, California, Illinois, and Ohio – the top five states with the highest foreclosure rate as of the end of last year.

However, it is essential to understand that you must look at the local real estate markets as well – just because a city is in California does not meet that the city has a high number of foreclosures on the market. For example, Fontana, California has very few distressed properties currently on the market. The following video has more information on the Fontana real estate market.

In conclusion, there are still some incredible real estate deals on the market; you just have to know where to look. Start your search by looking at the states with the highest foreclosure rates and then narrow your search down from there to find discounted properties on the market that are great for investors and potential homebuyers alike.