It always seems as if it’s a good news bad news scenario. In this case, the bad news is the number of foreclosures in the valley INCREASED by 18% from September, but the good news is the number of foreclosures are down from October 2010.

Lenders are still jockeying to figure out the correct balance of short sales to approve and the number of properties taken to foreclosure sale. Typically, the short sale process is the longer return on investment, even though it is a higher one. Lenders are still taking up to a year to process, approve, and complete the short sale transaction. Foreclosure can be done swiftly in six months, once a homeowner is late on payment.

The true advantage in the short sale process is the amount of inventory that remains occupied. In a foreclosure situation, the lender will sit on a vacant property for 2-4 months after they’ve taken it back through the auction process.

With the amount of distressed properties in the valley, it is still going to take some time for the market to level out and increase, once again. According to Daren Blomquist from RealtyTrac, “Arizona’s foreclosure levels are going to remain high for a couple of years before we return to normal.”

This means plenty of inventory still to be absorbed, potential for the market to dip further, another wave of investors coming in to purchase properties, the rental pool increasing, and the list goes on.

Whatever your take on the situation is, know that the opportunity is there for those that want to invest, and the opportunity is there for those that want to complete a short sale.