After 2006, many thought the Colorado foreclosures couldn’t get much worse. During that year, the state experienced a 30% increase in the amount of defaults filed since 2005, and although many expected they hadn’t seen the end of this trend, few could predict what was to come in 2007. Only nine months into the year, the number of Colorado foreclosure homes matched the total for the previous year, topping out at over 28,950 homes entering some stage of foreclosure or default.

Colorado has long been at the forefront of the national upward trend in foreclosures that has occurred over the past few years. People got used to seeing that Denver foreclosures were jumping upwards at incredible levels, or that foreclosures in Colorado Springs were beginning to creep up to match the levels seen in lower income and urban areas.

But now it seems the situation has gotten extremely desperate. By the end of 2007, the total number of foreclosed properties in Colorado had again risen by more than 30%. But while this may be a sad story for homeowners, the market is ripe for an upswing, especially given the volume of homes now being sold at auction.

Other statistics show that during the first nine months of 2007, over 19,000 homes were actually sold at foreclosure auction, compared with roughly 15,000 in 2006. This means that more and more homes are actually continuing through the default stages to eventual auction sales, rather than being paid off during the pre-foreclosure period. In fact, the rate of homes that end up being sold after going into default has risen from 1 in 2 during 2006, to 2 in every 3 during 2007.

So what does this mean for investors? First of all, it means that there are a lot more homes available on the market for sale, which inevitably drives prices at auction down. But what’s more interesting is that when you take a closer look, you see that these homes are not being bought up by the public at these auctions.

The Denver Post reports that one real estate foreclosure specialist and public trustee in the area recounted a story that speaks to what’s happening to foreclosure real estate in Colorado: “We had 28 foreclosure sales today,” said Debby Morgan. “And they all went back to the lender.”

It seems that the market for foreclosed homes is so large in Colorado that very few homes are even being bid on at auction, and instead are being handed back to the banks, private lenders and government agencies who issued the original defaulted loans. So whether you’re in the market for Boulder foreclosure homes or Steamboat Springs foreclosures, now is the right time to jump in and find a great deal.

This applies not only to auction sales however, it also applies to buying bank foreclosures and government foreclosures on HUD and VA homes. With so many properties going back to the lenders, many are becoming overwhelmed by the sheer volume of properties they must manage. Keep in mind, the primary business of banks and government agencies is not to sell homes, and for many of these businesses these foreclosures properties can be a burden. This will no doubt drive prices way down, as they look to unload these properties as fast as possible.

Foreclosure investing in Colorado has long been recommended, but now it seems there is very little competition for these homes, and if you’ve been considering looking into buying Aspen foreclosures or Butte foreclosure homes, now is the optimum time.

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