real estate investingNow that prices are rising and the number of homeowners defaulting on their mortgages has slowed to a trickle, you might think it’s impossible to find a deal on a foreclosure. There’s no doubt the foreclosure picture has changed dramatically in the past two years, but there are still many discounted properties available if you know where to look.

Legions of big and small investors have gobbled up the bulk of foreclosures that once flooded housing markets in cities like Las Vegas, Los Angeles, and Miami, and tight lending standards have dramatically reduced the flow of new defaults in most markets. In a handful of cities, however, significant numbers of foreclosures are still available because processing has been slow.

The geography of foreclosures is changing

In some markets—a few of which may surprise you—defaults and new foreclosures have actually been increasing because the local economies are soft and homeowners can’t keep up with their mortgage payments. For example, foreclosures are up year-over-year in New York City (77 percent), Philadelphia (20 percent), Washington, D.C. (19 percent), and Baltimore (14 percent), according to a March 2014 report by RealtyTrac.

These new foreclosures will take time to process, especially in judicial states such as New York, Pennsylvania, and Maryland, where a court order is required to foreclose. However, this upswing in foreclosures could be a good opportunity for investors who will be looking for good deals on properties in the future.

Whether you’re looking for an investment property or your new home, you may be able to find an affordable foreclosure in one of the five markets listed below. These are the top markets in the country in terms of inventories of completed foreclosures, as reported by CoreLogic at the start of 2014. The first two columns provide data on existing inventories, while the third gives an indication of future foreclosures, including data from CoreLogic on the percentage of mortgages that are seriously delinquent compared to all mortgages in the market. For comparison, CoreLogic reported that the national rate of serious delinquencies in January was 5 percent.

The fourth column, from RealtyTrac, shows the year-over-year trend in foreclosure filings to give a sense of whether foreclosure activity is increasing or decreasing in each market.

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Steve Cook is executive vice president of Reecon Advisors and covers government and industry news for the Reecon Advisory Report. He is a member of the National Press Club, the Public Relations Society of America, and the National Association of Real Estate Editors, where he served as second vice president. Twice he has been named one of the 100 most influential people in real estate. In addition to serving as managing editor of the Report, Cook provides public relations consulting services to real estate companies, financial services companies, and trade associations, including some of the leading companies in online residential real estate.