Foreclosure Trends Are Shifting — What Does That Mean for Investors?

[David Litt]

I was looking at some recent foreclosure data and noticed something interesting:
While foreclosure filings overall are still below their peak from the 2008 crisis, certain markets are seeing noticeable spikes year-over-year.

For example:

• Some mid-size cities in the Midwest have foreclosure rates up 25–30% compared to last year.

• Coastal markets with high property taxes are also showing an increase, even though property values remain strong.

• Rural areas, surprisingly, are seeing some of the fastest jumps — possibly due to limited job markets and fewer refinancing options.

What caught my attention most is how uneven the trend is. Two counties in the same state can have completely different foreclosure climates depending on factors like:

• Employment stability

• Property tax rates

• Homeowner equity levels

• Local lien enforcement policies

From an investor perspective, this raises some big questions:

• Are we entering a phase where micro-market analysis will matter more than national trends?

• Will tighter lending standards prevent a repeat of the mass defaults we saw in the last recession, or is this the first sign of a broader shift?

• How should buy-and-hold vs. fix-and-flip investors adapt if certain markets start seeing higher distress?

I’d love to hear from others — are you seeing foreclosure activity picking up in your local market, or does it still feel like business as usual?

[Jay Hinrichs]

Quote from @Roger Johnson:

Worth adding NC-specific context here — North Carolina is one of the most dramatic examples of this shift.

NC foreclosure auctions were up 52.83% YoY in Q4 2025, and that's showing up at the courthouse. More properties, more bidders in the metros, and upset bid periods that extend further as competition intensifies.

What makes NC interesting: it's a deed state, not a lien state. No certificates, no passive redemption play. You show up at the commissioner's auction, bid, and then survive a 10-day upset bid window where anyone can raise your bid by 5% or $750 minimum.

The real opportunity is the gap between primary and secondary counties. Mecklenburg and Wake get the attention, but rural Piedmont and coastal counties — Anson, Scotland, Bladen — have growing inventory with thin turnout.

Anyone else tracking NC or seeing similar primary/secondary splits in their state?

this is very common in most states where the money is concentrated in the metro areas and rural areas not so much.. I dont like those upset bid rules.. its hard enough to track these then someone bids higher after the sale and your forced to bid again.