Bargain Homes USA: The Best and Worst States for Foreclosures
As of the date of this article, there are more homes on the market in the US than there have been for a decade, and one of the hottest sectors is foreclosures. But those looking for foreclosure bargain homes will find that some areas are better than others, and some are worse.
Because of local economic factors, each state is influenced differently by the recent slowdown in the housing market. Some regions sat on the sidelines and stayed relatively affordable during the recent bull market in housing. Now that the bubble has burst, those areas are more immune to foreclosures than are the hot roller coaster markets of places like California. Because they had less to gain from the upswing, they have less to lose as the market tumbles. On the other hand, super-inflated regions of the country will see a surge in foreclosures because as the saying goes “the bigger they are, the harder they fall.”
Bargain Homes has identified areas of particular interest to foreclosure buyers.
These are our top five states for foreclosures, because of the high number of affordable properties now on the market and listed at Bargain Homes:
- Texas:
More than 11,000 pre-foreclosure / foreclosure properties are available in Texas, with about 10 percent of those in the fast-growing and high-potential Houston area. There are many compelling reasons to invest in Houston. Higher oil prices are actually good for that city’s economy; the cost of living there is one of the lowest in the nation, and the area is poised for growth in the foreseeable future.
More than 3,000 foreclosure properties are listed on Bargain Homes in the greater Dallas-Fort Worth area. And for those interested in vacation homes, on the desirable coastline of Corpus Christi and Padre Island there are 134 active foreclosures. But Bargain Homes lists nearly twice that many in pre-foreclosure, indicating that as winter weather approaches and temperatures fall, so will prices for beach property. (Search Texas Foreclosures)
- Colorado:
Another western state tops the Bargain Homes list, where more than one out of every 500 homes is under foreclosure, and foreclosures are up more than 60 percent from last year.
Sperling’s Best Places – one of the nation’s leading providers of demographic data and a Bargain Homes partner – forecasts strong job growth in Fort Collins, where there are some 300 foreclosures within commuting distance. And Fort Collins was ranked one of Money Magazine’s Best Places to Live in 2006. (Search Colorado Foreclosures)
- Ohio:
Bargain Homes lists 8,000 foreclosures in Ohio, which is ranked as one of the nation’s hottest foreclosure markets for 2006. A recent check of listings on Bargain Homes indicated that in the Cincinnati area there were almost 1,000 foreclosures, starting at prices below $20,000. These properties can be great investment opportunities, considering that Ohio’s Census Overview shows the median value of an owner occupied housing unit to be $103,700. In addition, the average sales price of a 1 bedroom home in the state of Ohio was $83,408 in recent months, and prices appear to be holding steady. (Search Ohio Foreclosures)
- California
California has seen tremendous growth in real estate prices in recent years, placing most properties out of reach for first time home buyers and newcomers to the state. However, a record number of foreclosures in California are providing a rare opportunity for both buyers and investors to enter the market. Where the average sales price of a 1 bedroom home is close to $397,000, and the average sales price of a 4 bedroom home is $653,000, Bargain Homes lists more than 625 properties for under $90,000, several of which are 2 and 3 bedroom properties. Aside from the obvious real estate investment opportunities presented by Bargain Network, California is also ranked very highly by Sperling as one of the best states in the US to live, and is host to several large employers such as Genentech, Vision Service Plan, Qualcomm, Chevron Corporation, Hewlett-Packard, and McKesson. (Search California Foreclosures)
- Florida:
Bargain Homes lists close to ,2400 active foreclosures in Florida, and an astonishing 15,767 pre-foreclosures. Within 25 miles of Miami there are 3,900 properties in pre-foreclosure and 151 active foreclosures. Florida, much like California, is considered a particularly good investment area as the price of property in the state has doubled since 2001, and market trends show continued growth into the future. Sales statistics from recent months peg the average sales price of a 1 bedroom home at $186,334, and the average sales price of a 4 bedroom home at $405,840. Bargain Homes lists over 1,350 homes for less than $40,000 in their database, many of which are 3 and 4 bedroom homes. (Search Florida Foreclosures)
Worst Places for Foreclosures
We ranked the following states as our top five worst places to find foreclosures in 2006:
- Maine
- North Dakota
- New Hampshire
- Hawaii
- Virginia
While ranking the states, we factored in several parameters, including foreclosure activity and economic stability, The five states above have demonstrated relative economic stability, and we do not expect to see high rates of foreclosures in those states in the near future. Browsing the listings of foreclosures on Bargain Homes will confirm that these five states are not going to set any records for foreclosures in the near future. If you have money to spend on foreclosures, you may prefer to look elsewhere. But if you do buy property in one of these rather tame and predictable states, you can expect good value and a solid, conservative investment outlook. Those who are especially interested to invest in those states can find some foreclosures, but should not expect bargain basement prices and high profit margins.
States listed in our “Five Worst” didn’t make many real estate headlines, because in those places price inflation was relatively tame. The potential for foreclosures in those “boring” markets is low, and houses should retain their value relatively well as other states experience a significant price slump.
Of course many states that missed out top five rankings compare favorably as “Best and Worst Places for Foreclosures”, and by checking Bargain Homes listings state-by-state, you will find several other strong contenders in both categories.