Those engaged in foreclosure investing are sensitive to any indicator, when released, that could reveal some morsel of valuable information about the foreclosure market and where it is headed. The future, after all, is anything but certain, and investing in distressed properties carries with it some degree of risk.

Today’s news that foreclosure activity hit a seven-month high in the month of October is one of those valuable pieces of information that undoubtedly perked the attention of foreclosure investors across the country.

What, exactly, does this mean at this point in time and for the future?

First, we will look at what was revealed. The number of properties that received a foreclosure filing – from a notice of default to a notice of sale – rose by 10% from September to October. That is a sizable increase, especially when one considers the fact that a key piece of information – the percentage of homeowners who were at least two months behind on mortgage payments – also rose heavily.

Additionally, 22.5% of all properties – nearly 11 million homes – were underwater, or owed more than what the property is worth with today’s values. Since underwater homes are forerunners of residential foreclosures, the statistic is troubling for some experts.

What do these statistics, collectively, mean? The spike to a seven-month high is one data point, but it is revealing of a greater trend. Foreclosure filings, as a whole, are increasing and have been since the end of July. Coincide this data with analysis of the market and of banks and other lenders resuming foreclosures and one can see the trend: More foreclosures will enter the market soon.

Supply will be enlarged, which will drive down prices even further. As an investor, you will have more ample access to buying opportunities, with plenty of single family homes and multi family homes to choose from per market.

The added supply will make these properties cheaper, and the super-low interest rates will add to that affect. Indeed, this week rates on 30-year fixed-rate mortgages fell below 4.00% for only the second time in recorded history. The two pieces combined indicate that the market will be defined by one, central theme for the next year: Affordable foreclosed homes for sale with plenty of supply, enormous profit potential, and dirt-cheap financing.

To sum it up, should the trend hold – and all signs indicate that we are in for a very lengthy trend – this market will be an investor’s dream.

Part of the American dream is homeownership, which has definitely not changed despite the increase in foreclosures across the country that leaves many homebuyers weary. Take the current real estate market out of the picture and imagine a normal economic situation—why do people buy homes? One reason people purchase homes (apartments, single family homes, etc.) is to save money on rent, while building equity. Another reason is the expectation of appreciation, which essentially makes the investment increase in value every year. Basically, people buy a home to fulfill the American dream and because they view it as a better deal in comparison to renting.

However, do homes really appreciate as much as we think? According to a recent survey, the answer is no.

The survey concluded that 42% of people believe that home values increase 7% every year. Obviously, if this number were factual – which it is not – then the increase would be much less due to the recent fall of home prices. So exactly how much do homes appreciate each year? Home values increase somewhere between 2% and 5% each year when the real estate market is stable.

Unfortunately, these numbers are definitely not indicative of the current real estate market, which has experienced huge decreases in home prices over the last five years.

So what does all of this information mean for potential homebuyers?

With the current home prices being incredibly low, now is actually a great time to invest in real estate. The housing market will recover (and so will the United States economy); however, it will take time. Therefore, you should only purchase a home if you expect to live in the house for around 7 years. This amount of time will allow the housing market to get back on stable ground (which will raise your home value), while also allowing you to build up equity.

There are several advantages to purchasing a home that extend beyond investment opportunities, including tax benefits. Homeowners are able to deduct their home loan interest each year. Furthermore, with rental properties being in high demand, rental prices are increasing – often making mortgage payments lower than your monthly rent.

In the end, home values do not appreciate as much as many people think. Instead of increasing approximately 7%, most homes appreciate 2% to 5% when the market is “normal.” Clearly the current real estate market is far from stable and these numbers are not accurate representations of where we stand today. However, there are numerous benefits of homeownership and great investment opportunities for anyone seeking to live in their home for around 7 years.

According to the study, single family foreclosure homes in New York City have dominated housing reports, but the rise in foreclosures among multifamily rental dwellings in the area have actually risen at a pace that has not been seen since the early part of the 1990s. In addition, such foreclosures actually affect more people since rental multifamily buildings house almost 50% of all New York residents.

The center's report showed that since at least 2007, over 2,100 rental multifamily properties have received notices of foreclosure in the city, with over 44,000 households believed to have been affected by these notices. Among the boroughs, Brooklyn reportedly has the most number of multifamily foreclosed homes for sale in New York City. The report claimed that this may be partly due to the fact that the area has the biggest stock of small rental multifamily homes, with most of them ranging between five and 19 units.

In Brooklyn, nearly 1,500 multifamily rentals have received notices of foreclosures since 2007, affecting nearly 15,000 residential units. The study also revealed that seven out of the ten neighborhoods with the highest number of foreclosed multi family homes for sale in the city can be found in Brooklyn. Last year, a total of 373 foreclosure notices were issued to Brooklyn multifamily rentals, the report also claimed, with Bedford-Stuyvesant accounting for 18% of these foreclosure-related notices.

The increased number of multifamily foreclosed property for sale in New York City, market analysts have stated, affects tenants and whole neighborhoods, particularly those with huge supplies of multifamily rentals. Most of these multifamily buildings, they further added, are deteriorating as they remain distressed and unoccupied. Such distressed buildings usually receive 21% more code violations within the quarter when the notice of foreclosure has been filed.

During the six months following the foreclosure notice, an average of 15% more code violations are often reported for these properties. The report also asserted that these foreclosed multi family homes for sale can be really costly for the city. Moreover, local communities, households and the general housing market are also affected by the deteriorating properties, particularly in hard-hit boroughs like Brooklyn.

For the said time frame, median home price for the same home type increased by 2 percent to $193,000. Homes for sale spent around 98 days on the housing market, which is longer by 27 percent last year. New home listings, which include foreclosed homes for sale in Austin, declined by 24 percent, while active listings dropped by 8 percent.

Although the total number of homes sold is the same for February 2011 and February 2010, there are still noteworthy differences observed. For starters, pending sales activity for the single family residential properties went down by 11 percent. Experts believed that this can be attributed to the expiration of the homebuyer tax credit incentive program. Although the housing market’s situation was influenced, albeit artificially, by the said incentive, it was clear the tax credit boosted home sales activity.

Meanwhile, leasing activity for the city increased for the said month. There were 1,117 houses leased, a 5 percent increase from a year ago. Median lease amount was pegged at $1,200, 9 percent higher than last year. The increase in lease activity can be due to the large volume of houses ending up as foreclosure homes in Texas. A lot of the troubled borrowers had no choice but to rent since their credit scores will not allow them to purchase a new home in the next couple of years.

The number of homes on foreclosure in the entire state remains to be high. Nationally, foreclosure rate for the month of February was recorded at one filing for every 577 homes. There was some decline in foreclosure activity during the first couple of months of the year as a result of lenders trying to correct any mistakes which could give claims of illegal foreclosures some merit.

In most states, residential properties accounted for a significant percentage of the total home sales activity as many buyers would like to take advantage of their hugely-discounted selling prices. These properties included both foreclosed and short sale houses as well as homes in the pre foreclosure stage. The drop in sales is also attributed to the cold winter months, wherein a rather sluggish sales activity is usually experienced.

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Although foreclosed homes in Raleigh did pose challenges to the house construction sector last year, homebuilders still did well to record improved numbers from the previous period. In 2010, a total of 8,600 building permits were issued in the region, representing an increase of 85% from 2009 levels. A big percentage of these permits were accounted for by multifamily construction projects, although permits for single family construction also recorded an increase.

Despite the presence of foreclosure homes in North Carolina, analysts stated that homebuilders saw a lot of promise for the region's housing market, resulting in more building projects started last year. They added that homebuilders might have perceived that the home market is on its way towards a recovery given the number of permits filed for in 2010. House builders might have gotten it right, analysts further said, as prices of dwellings rose in Raleigh, unlike most U.S. home markets which posted massive price declines in 2010.

The price of single family homes and other types of existing dwellings rose last year by 4% compared with a year ago. However, analysts are predicting a steep decline this year, as high as 10%, as foreclosures are projected to rise in all markets in 2011. Despite the less-than-perfect outlook for home prices, local analysts believe that excess housing supplies will be absorbed quicker in Raleigh than in other regions as people moving to the area continue to increase in number.

Regardless of the expected rise in home foreclosures, building permits are projected to reach more than 9,500 this year which will provide a lot of new homes to the region. More buyers are expected to pluck them out of the market though, as more families are reportedly relocating to Raleigh due to its strong job market. The unemployment rate of the region has gone down to 8.4% last year.

With very positive predictions for the job market and heavy optimism among homebuilders, analysts are predicting that Raleigh will outpace majority of other U.S. markets in terms of housing industry growth. For 2011, they expect single family homes and other residential properties to be purchased at a rapid pace in the region as the market benefits from the strengthening economy.

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Foreclosed homes in Columbus and in most of the state's local areas eased down last month as January 2011 figures show a drop in the foreclosure activity of the state. For the month, a total of 8,924 foreclosure-related filings were recorded in the region, representing a 20% decline when compared with January 2010. When compared with December 2010, the decline was 15%.

The figure included foreclosed homes in Ohio up for an auction sale, notices of default and properties repossessed by lenders. Last year, the state posted a full year decline of 5% in terms of foreclosure activities when compared with 2009 levels. For the month of January 2011, Ohio's nationwide ranking in terms of foreclosure numbers is 13th. The top three states with the highest foreclosure rates for January remained Nevada, Arizona and California.

Despite the drop in foreclosure activities, including those related to multi family foreclosures, housing industry analysts stated that this should not be taken as a sign that the housing market crisis is at an end. According to them, the drop is mainly due to the controversy surrounding lenders' alleged use of faulty documents in filing for foreclosures; an issue that forced an almost nationwide moratorium on foreclosure processing and sales in the fourth quarter.

Analysts have also stated that the decline in the number of homes for sale foreclosures, which was mirrored in almost all parts of the U.S., only meant that banks are weighed down by the sheer volume of foreclosure cases that piled up during the fourth quarter of 2010. They stated that lenders are taking a longer time reviewing documents after the robo-signing controversy.

Local analysts warn that single family and multi family foreclosures are likely to increase again in Ohio this year. The same is predicted for the whole country as lenders restart cases that were stalled by the documentation controversy.

With the number of foreclosed properties in various areas of the state, including Pensacola foreclosures, climbing nonstop in the past three years or so, any slowdown in the flood of distressed homes is eagerly latched on by the public and some members of the industry, in the hope that it is a sign that things will soon be getting better. In Palm Beach County, new foreclosure filings fell by 28% in 2010 compared with a year ago, posting the first year-end decline since the crisis started in 2006.

Palm Beach recorded a total of 20,417 first-time filings in 2010 compared with the 2009 total of 28,284. Meanwhile, initial filings for Florida foreclosures also fell last year, producing a statewide decline of 32% compared with 2009 levels. Industry experts have attributed part of the decline to the moratorium put in place during the last quarter of last year.

They predict that foreclosure numbers will escalate in 2011 as the cases stalled by the moratorium get restarted. Experts also stated that higher monthly loan payments in 2011 for adjustable rate home loans will add further to the state's foreclosed property tally and will result in another wave of cheap single family homes flooding the Florida market.

Florida ranked third in 2010 in terms of foreclosures, behind only Nevada and Arizona. A total of 485,286 residential properties received either a foreclosure notice or a sale notice in 2010 or were repossessed by lenders. This total gives the state a 6% foreclosure rate last year. For Palm Beach County, over 43,400 houses were under some form of foreclosure last year, which accounted for 7% of total housing units in the area.

According to housing market analysts, although the number of homes entering the first stage of foreclosure has gone down, the number of properties repossessed by lenders increased. This, experts stated, is more significant in gauging how much the supply of cheap single family homes will increase in 2011.

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Louisville foreclosures jumped by 20% in 2010 compared with 2009, according to year-long housing market reports. A total of 7,540 residential foreclosure-related filings were issued in the metro area during the year. Housing industry data also revealed that foreclosed property totals in the city have been rising consistently since 2007. The good news, analysts stated, is that the level of increase is not as high as the levels recorded in metropolitan areas that experienced extreme housing booms.

Statewide, Kentucky foreclosures follow the same trend as city housing figures during 2010, with the whole state in a relatively better position during the year. For Louisville, one household out of every 73 received a filing in 2010; a ratio that is much better than the national average wherein one household out of every 45 received a filing. For 2010, Louisville was ranked 82nd among 203 metropolitan areas in the U.S. in terms of number of foreclosed property filings.

Nevada remained the region with the highest rate of foreclosure, including filings for multi family foreclosures and other types of residential properties. In 2010, one household in Nevada out of every 11 was in some form of foreclosure. For the whole U.S., foreclosure-related filings jumped by 2% compared with 2009 levels and surged 23% compared with 2008 figures.

According to housing market analysts, increase in year-over-year foreclosures might have been higher in 2010 if not for the moratorium imposed by major lenders all around the U.S. during the last three months of the year. The temporary halt in the processing and selling of foreclosed properties implemented by lenders helped lower the number of foreclosed properties for the year, but the number still reached record levels.

Local analysts are predicting that, in 2011, filings for single and multi family foreclosures will slowdown in Louisville. However, they also stated that the national housing market will require a few more years before it can return to normal levels.

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According to housing market observers, Portland foreclosures and unemployment levels will dictate the condition of the city's housing market in 2011. With unemployment rate in the metro area pegged at 10.1% as of November 2010, Portland is considered one of the most vulnerable areas in the U.S. in terms of continuous housing price declines.

Statewide, prices are also likely to decrease further during the year with Oregon foreclosures maintaining their high levels and state unemployment pegged at much the same rate as the city rate at 10.5% as of November, according to data released by Clear Capital. Nationally, housing prices are also projected to drop during the year, with unemployment and a shaky real estate market also cited as primary reasons.

For the whole U.S., prices of residential properties are predicted to decline by another 3.7% in 2011. Nationwide home prices fell by 4.1% during 2010, making the year one of the worst performing period on record for the housing market in terms of housing unit prices. Both newly built homes and foreclosure residential properties are expected to post price declines during the year, unless unemployment is cut down and the national economy records an abrupt turnaround.

In terms of regional markets, the West is projected to record the highest price decline for 2011, with analysts expecting a drop of over 8%. The dismal forecast for the region is hinged on the huge number of foreclosures in areas like California and Arizona, analysts have revealed. Among the top metro areas of the U.S., Virginia Beach is projected to record the highest price decline for the year, with analysts expecting a 12.8% drop.

Meanwhile, Washington D.C. has been picked by analysts as the metro area that will record the highest price increase in 2011, with the area expected to post a 6.5% price gain. All in all, housing experts agree that 2011 will be much the same as 2010, with foreclosure residential properties maintaining their levels in most areas.

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The November median price for new houses and Tuscaloosa foreclosures was at $139,900, hardly different than the October median price of $140,000. A total of 75 residential properties were sold in the city in November with an average price of $159,253, slightly lower than the October average rate of $160,161 when 97 dwellings were sold. According to the University of Alabama's Center for Real Estate, the housing market of the area remained in favor of buyers in November.

Although prices of new houses and Alabama foreclosures hardly changed at all between October and November, year-by-year comparison showed that November 2010 posted a significant price improvement compared with the same 2009 month. Median rate for the month was 9.73% better than year-ago levels. November 2009 median price was pegged at $127,500 with total number of houses sold at 119. The average price, on the other hand, improved year-by-year by 13.18%.

According to housing industry analysts, the lower prices and higher total of Freddie Mac homes and other residential properties sold in November 2009 showed the effect of the federal tax credit program on the home purchasing market as buyers tried to take advantage of the perks offered by the government to first time homebuyers. They added that prices of houses in the whole state are still being weighed down by the huge supplies of foreclosed residential properties.

They explained that new houses are forced to compete with foreclosures and prices are the market aspects getting hit. Analysts also added that huge supplies compared with minimal demand is also pulling prices down. As long as supply outpaces demand, prices will likely remain below desired levels, analysts further claimed.

November housing figures also saw Tuscaloosa prices for residential properties, including Freddie Mac homes, being lower than the rates of the metro areas of Huntsville and Birmingham. However, local prices are better for the month compared with Montgomery and Mobile.

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