This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Worst Places to Buy Foreclosures in 2013

BOSTON ( TheStreet) -- The U.S. foreclosure crisis looks like it's finally winding down -- great news for homeowners, but decidedly less positive for house hunters and real estate investors.

"From the perspective of buyers, some markets might not be as attractive any more," says Daren Blomquist of market watcher RealtyTrac, which found recently that U.S. foreclosure-related filings fell during 2012 for the second straight year.

RealtyTrac, which monitors county registries of deeds around the country, says lenders filed paperwork covering around 1.9 million foreclosures, deed seizures and property resales in 2012 -- a roughly 34% drop from 2010's 2.9 million peak.

The firm also analyzed all 102 U.S. metro areas with 500,000 residents or more and found that filings fell by double-digit percentages in many locales during 2012.

Blomquist says house hunters and investors looking to buy foreclosures on the cheap in those cities can expect to "compete against each other for places this year. The foreclosure supply is drying up, but there's still interest from other buyers."

The expert says markets with the worst prospects for buyers are generally in "non-judicial foreclosure" states, where laws allow lenders to seize properties quickly with little court involvement.

For instance, the average foreclosure finalized in nonjudicial Texas during 2012's fourth quarter took just 113 days from start to finish versus 1,089 days in judicial-foreclosure New York.

Blomquist says nonjudicial states' speedier processes have allowed banks to clean out backlogs of delinquent properties there, making fewer distressed homes available for would-be buyers.

"The worst cities for foreclosure buyers are typically those places that worked through their problems fairly quickly," he says, adding that people looking for deals should check out metro areas with more problems.

Here's a look at the five metro areas that RealtyTrac predicts will offer would-be foreclosure buyers the worst deals in 2013.

The firm based its rankings on a number of factors, such as how many months of unsold foreclosures each city had on the market as of Dec. 31.

All figures cover houses, townhouses, condos and apartment buildings with four units or less. Average percent discounts on foreclosures refer to properties sold during 2012's first 10 months, the latest period with data available.

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,433.61 +46.40 0.27%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs