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.

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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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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Most of the foreclosed homes in Charleston are auctioned off every two weeks at the Charleston County Judicial Center. Local reports reveal that auctions of foreclosures used to be held at the steps of the courthouse, but the increase in number necessitated moving the auction inside one of the county's court rooms.

According to local officials, the continuous rise in the number of foreclosures in South Carolina is a sad occurrence, but borrowers are always given a chance to plead their cases in court and find alternatives to foreclosures. They stated that lenders do not declare a mortgage in default until the borrower is three months behind, but once the loan has been deemed delinquent, the process to foreclosure will be quick.

Area housing data showed that foreclosed properties, including single family foreclosure, numbered around 550 in 2006. In the current year, analysts are expecting that number to reach as high as 3,000. They reveal that most of these homes will not be sold to third party buyers but will revert back to lenders. This is so because the state of South Carolina follows the judicial method of processing foreclosures, which means that every case will have to be addressed by the courts.

Properties from foreclosure listings are usually auctioned off at the Judicial Center every Tuesday of the first and third week. Bidders have reported that the auction process is a good way to sell off the properties, with the process almost similar to that of eBay bidding. One home buyer reported winning a residential property for a bid of a little over $330,000, with the actual worth of the house estimated at $450,000. Five percent of the winning bid amount was required right after the bidding.

Auction officials have advised people who wish to bid for single family foreclosure or any other type of foreclosed property to do their homeowner properly before making any bid. Finding out everything they can about the property will help them get better bargains, officials have added.

Owners of foreclosed homes in Glendale and in other counties and cities of the state can take advantage of the state project whose primary aim is to reduce the amount of mortgage payment and bring it to a level that is as close as possible to the value of the residence.

The U.S. Department of Treasury has recently announced the release of funds worth $1.5 billion designed to finance foreclosure mitigation efforts in states suffering from huge supplies of foreclosed dwellings. With Arizona foreclosure listings having some of the highest statistics all around the country, it was no surprise that the state received a big share which totaled $125.1 million.

However, despite the considerable financial aid from Treasury, state officials were worried that the sheer volume of properties under lists of houses foreclosures will not allow the federal aid to make any dent on the housing market troubles of the state. Officials have estimated that the recent funding from the federal government can help, at most, 4,000 households in the area.

In an effort to alleviate part of the problem of single family home foreclosures in Arizona, the latest program will focus on addressing issues that contribute to the housing problem, including income loss. It will offer various options to troubled homeowners, including providing a permanent loan modification that will allow a mortgage reduction of as much as $50,000.

It will also offer opportunities for homeowners to acquire a second loan settlement and provide some of the unemployed with help in paying their mortgages until they can find some form of employment. The state has emphasized that Save My Home AZ will be made available to borrowers experiencing mortgage payment problems caused by extenuating circumstances.

Such circumstances may include death in the family, divorce, under employment or loss of employment and illness. State officials further added that the state initiative will be open to all types of foreclosures, including single family home foreclosures, as long as primary criteria are satisfied.

High rates of foreclosure have hit most areas of the state, including Durham foreclosure homes. However, declining home prices are not the only negative impact these foreclosures have had on the city. Additional paperwork and clogged court schedules are also part of the problem.

As North Carolina foreclosures escalate, court cases also increase. One prime example where this is happening is in Mecklenburg County. According to county court officials, on a regular day, the court can have around 30 foreclosure cases scheduled for two-hour hearings. Sometimes, out of these 30, almost half will not be addressed because people do not show up.

The courts are always filled with people involved in the housing market, from homeowners to realtors to people who buy foreclosure properties for sale. Some market observers blame banks for the foreclosure backlogs, claiming that some of them do not get back quickly to borrowers to settle things.

Aside from the mountain of paperwork, issuing summons also take a lot of effort and resources, with court deputies averaging more than a thousand summons for single family properties, multi family dwellings or commercial property owners within a single month. Another factor that aggravates the backlog is the increased tendency of the people involved to not show up during the preliminary hearing.

Court officials have stated that it seems that more and more property owners are giving up and do not bother with going to court anymore, preferring to just allow courts to order a foreclosure on their properties. On a given day, 18 homeowners out of 30 cases can fail to make an appearance, leaving the fate of their properties on the hands of the court and the bank that filed the lawsuit.

Local court officials believe that the foreclosure backlog involving single family properties, multi family homes and other types of foreclosed structures will continue for the rest of 2010 or until the housing market hits its bottom and start its slow upward climb.

Bakersfield foreclosure auctions contain some of the biggest numbers of foreclosed dwellings in the whole state, which is why the city is one of the top 10 areas among those that present the highest foreclosure risks to homeowners. Along with Bakersfield, other California mid-size metropolis cities that are considered risky places for homeowners are Modesto, Vallejo and Stockton.

The number of homes going under California foreclosure auctions remains high and some real estate analysts believe that the state is far from any recovery and would likely experience another wave of foreclosures. In such areas like San Francisco and Los Angeles, analysts are expecting home foreclosures to continue to rise in the coming months, with the number of delinquent mortgage borrowers being their primary basis.

According to local market analysts, single families foreclosures will flood the market in the coming months as almost 10% of home loans have been delinquent for 90 days or more in the cities that made it to the riskiest places list. Analysts further added that some help will be provided to a big number of these delinquent borrowers through government programs and through loan modification efforts by lenders.

However, analysts believe that these efforts will not stop the state's listings of foreclosed homes from expanding as majority of dwellings with restructured loans eventually end up foreclosed a year after the loan is restructured. In addition, market observers believe that the budget crisis faced by California – which was largely fueled by the housing market crisis – will make the foreclosure problem worse than it would have been if the state's economy was in a strong position.

With loan delinquencies and cash-strapped governments weighing down on the finances of homeowners and borrowers, real estate analysts believe that single families foreclosures will continue to rise in number in several areas of the U.S., including a handful of cities in California.

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From its seventh-ranking in April, Michigan moved up to fifth place in foreclosure rate in May as its total foreclosure filings jumped up by 6 percent to 20,322 from 19,173 in April. The number of units that entered home foreclosure listings also increased from 6,252 units in April to 8,009 units in May, a jump of more than 28 percent.

All in all, the total of housing units that were purchased back by lenders through home auctions in Michigan in the first five months of the year was 32,865. Of this total, a huge number were residential units that entered Detroit and Southfield foreclosure auctions. Southfield is a Detroit suburb and part of Greater Detroit.

Analysts said that the spike in multi family and single family foreclosures in Michigan in May resulted from the completion of foreclosure filings that were delayed in the previous months and then completed in May. Michigan has a state law requiring mortgage lenders to give distressed homeowners 90 days to save their homes through the Home Affordable Modification Program.

With this state law, the number of homes posted for trustee sale dropped from 7,644 in April to 7,000 in May, down by 8.4 percent. The number of default notices increased slightly from 5,277 in April to 5,313 in May.

Recently, hopes were raised in Michigan when General Motors increased its investments in its plants in the state and when it announced it had achieved its first quarterly profit in almost three years. GM set aside $700 million for the production of the hybrid car Volt in eight Michigan plants, in addition to its investments for the production of other cars.

With more capital investments and jobs coming from GM and other manufacturing firms, it is hoped that multi family and single family foreclosures in the state will eventually slow down.

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Foreclosure filings increased statewide in April, but the month-over-month increase rate was much lower than the increase rate in March. The March-April increase was 2.1 percent, far below the February-March increase of 21.3 percent.

During the month, foreclosure postings in El Paso County, where Colorado Springs is situated, reached a total of 477, based on records from the office of the El Paso County Public Trustee. The number signified some sort of stabilization, as it was down by only 3 units from 480 one year earlier and up by only 7 units from 470 in the previous month.

In the first 4 months of this year, a total of 1,688 units were added to distressed units available for Colorado Springs foreclosure investing, although down from 1,696 units one year earlier. This number included pre foreclosures and repossessions. Homes that were not yet repossessed can be considered for investment, as more homeowners have been using short sales to resolve their mortgage problems.

In addition to the federal incentives for short sales under the Home Affordable Foreclosure Alternatives program, financially troubled homeowners have figured they can restart again and repair their credit score more quickly if they lose their homes to short sales instead of losing them to foreclosures.

Based on statements from the public trustee of Colorado Springs, single-family and duplex foreclosures and multifamily foreclosures are expected to reach a total of around 4,900 filings in 2010, which would be lower by about 10 percent than the 5,470 filings counted in 2009.

Local analysts said that the housing sector experienced signs of improvement in April, such as significant increase in home building permits and surge in tax collections, in addition to the slowdown in the pace of foreclosures.

The Pikes Peak Regional Building Department reported that the number of permits issued for single-family home construction spiked by almost 70 percent to a total of 127 permits in April compared to the total one year earlier. For the first 4 months, a total of 535 permits were issued, about two times the total during the same four-month period last year.

The increase in home construction helped push up tax collections, as sales taxes from construction materials increased. Total tax revenues, however, were still way below collection levels in the years before the housing crisis.

Real estate business people engaged in foreclosure investing in Colorado can still expect opportunities to choose the cheapest foreclosed homes for sale as nearly 6,400 homes in the state entered foreclosure in April, up by more than 2 percent from March and up by more than 16 percent from April last year. Of these homes, a total of 2,147 units or 33.6 percent were already bank owned.

In the first four months, a total of 22,405 homes in Colorado entered foreclosure, including 7,450 units of single-family and duplex foreclosures and multifamily foreclosures.

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