Best Areas for Buying Foreclosures

The first thing that you need to recognize is that every city, no matter its prosperity or economy, has foreclosures. Even Seattle, Washington, and Austin, Texas, two cities with foreclosure rates under 1%, have individuals who cannot afford to pay the mortgages and other payments on their homes.

But in these difficult economic times there are too many cities around the country are afflicted with high foreclosure rates, and the vast majority of those cities don't bode well for investment opportunities when it comes to purchasing foreclosed homes. If you're in the market for purchasing foreclosures, you want to make sure that the city you're looking in has some form of stability. Otherwise, your investment may be a lost cause.

Top Cities for Buying Foreclosures

According to Forbes Magazine, the top ten cities for buying foreclosures in America are as follows:

Washington DC: Actually, this particular city refers to the greater metro area of Washington-Arlington-Alexandria, three cities that have a combined foreclosure rate of only 1.6% and seem to be showing signs of recovery after a softened market devalued a number of homes.
Indianapolis, IN: With a foreclosure rate of 2.01%, Indianapolis is a prime location for investors and buyers looking to take advantage of a city boasting one of the highest vacancy rates in the country.
Seattle, WA: Seattle's situation is unique because their foreclosure rate (<.5%) is so low, but foreclosure savings in the city are in excess of $46,000, making the northwestern city an idea spot to take advantage of whatever foreclosures exist in the city.
Knoxville, TN: With a foreclosure rate of .6%, the college town of Knoxville remains extremely affordable, offering foreclosure savings of over $30,000 and low regulatory costs. It's not ideal for quick turnarounds, but there's plenty of value in a Knoxville investment.
Albuquerque, NM: Albuquerque's foreclosure rate is extremely low (.65%), but the city is just as stable, meaning that purchasing a foreclosed home in the New Mexico city doesn't present much of a risk.
San Antonio, TX: San Antonio benefits from a strong economy, like the rest of Texas, and its low foreclosure rate reflects that. At 1.06%, chances of finding a foreclosed home are slim, but it could pay great dividends in terms of savings.
Oklahoma City, OK: Those looking into purchasing foreclosed homes in Oklahoma City are likely to save as much as $34,000 in the process. But, with a foreclosure rate of .8%, the odds of locating a good match may be lower than an investor would like.
Nashville, TN: Nashville's foreclosure rate (.86%) indicates that the city is in pretty stable condition. That's good news for potential buyers who could stand to save up to $42,000 on a purchase.
Raleigh, NC: With a foreclosure rate just less than 1%, Raleigh benefits from a number of universities (North Carolina State, Duke, Central North Carolina) that keep the city vibrant and active.
Charlotte, NC: Charlotte's foreclosure rate is somewhat high for this lot (1.44%), but it remains one of the country's most affordable markets. Foreclosed homes offer savings of up to $60,000, too, which is awfully attractive.

The underlying theme with all these cities is that they are stable communities, ones in which there is a consistent industry. In turn, the foreclosure rates are relatively low, and there isn't much turnover. It can make finding a foreclosed home difficult, but the payoff could be great.

Stay away from cites like Las Vegas and Detroit, cities that are in a state of flux and may not turn around quickly. If you're an investor, it's unlikely you'll find someone to buy the house in return. If you're looking for a home, purchasing a foreclosed home in a struggling city could be a problem if you have trouble finding work.