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?