Market Updates Arielle Dixon February 17, 2025
The housing market has been through a whirlwind in recent years, and as we move further into 2025, distressed properties—including foreclosures, short sales, and REO properties—are becoming a growing reality for many homeowners. Economic uncertainty, rising interest rates, and shifts in employment have left some property owners facing difficult decisions. If you're in this position, you're not alone.
At a national level, we’re seeing a steady increase in foreclosure filings, though not at the crisis levels of 2008. This shift is largely due to the expiration of pandemic-era protections, inflation pressures, and a cooling job market. Investors and buyers looking for distressed opportunities are becoming more active, but banks and lenders are still taking a cautious approach, limiting massive inventory spikes.
California, with its high cost of living and property values, is experiencing an uneven distressed market. Some regions—particularly those that saw rapid appreciation during the pandemic—are now seeing a higher volume of distressed listings. Areas that had an influx of new homeowners during the last few years, many of whom took on loans at peak prices, are showing early signs of mortgage strain.
However, the state's housing shortage means that well-located distressed properties are still highly desirable. Unlike the last downturn, many struggling homeowners have equity, creating alternative options like loan modifications or strategic sales instead of outright foreclosures.
In the Bay Area, the distressed property market is highly localized. Tech sector layoffs, fluctuating startup funding, and corporate downsizing have left some homeowners financially strained, particularly in places like San Francisco, Oakland, and parts of the East Bay. However, due to continued housing demand and investor interest, properties don’t stay distressed for long—meaning those navigating pre-foreclosure still have options if they act early.
Livermore, Pleasanton, and the surrounding areas remain relatively stable due to strong local economies and long-term homeowners with lower debt-to-equity ratios. For homeowners considering selling, there’s still an opportunity to secure a strong exit strategy before foreclosure proceedings escalate.
Los Angeles has historically had one of the highest foreclosure rates in the state, and certain neighborhoods—particularly those with high investor ownership or older homeowners on fixed incomes—are experiencing a rise in distressed properties. The luxury sector, which had explosive growth during the pandemic, is seeing more price adjustments, creating opportunities for buyers but also financial stress for sellers who overleveraged.
That said, LA’s real estate market has always been resilient. Well-positioned homes are still finding buyers, and creative financing options are helping many homeowners avoid full-scale foreclosure.
If you or someone you know is facing the possibility of foreclosure, it’s important to understand that there are options. Whether it’s negotiating with lenders, considering a short sale, or leveraging existing equity to reposition, every homeowner’s situation is different. The key is acting early, having the right team in place, and knowing that you don’t have to navigate this alone.
My team and I specialize in helping homeowners in distress explore their best possible outcomes. If you’re feeling overwhelmed, we’re here to talk—without pressure, just real solutions. Let’s figure out the next steps together.
Sources:
National Foreclosure Trends: ATTOM Data Solutions
California Foreclosure Rates by County: ATTOM Data Solutions
Bay Area Market Insights: SFGATE
Los Angeles Market Conditions: Realtor.com
Interest Rates and Financing Impact: Statista
Stay up to date on the latest real estate trends.
Home Buying
Yes, rates are up. But serious buyers are finding real leverage right now.
Local Market
For families who want more than just a house—they want a future—this city is checking all the boxes.
Homeownership
Understanding the new $2.3M threshold and how it could impact Bay Area buyers and sellers
Advocacy
Real estate is personal, emotional, and global. Wherever you are, I’m here to help you move forward—strategically and supported.
Real Estate Investors
How McDonald’s quietly became a $42 billion real estate powerhouse—and what investors can learn from it
Corporate Relocation
How to Navigate a Cross-Country or International Move to California—Without Sacrificing Lifestyle, Timing, or Sanity
Market Updates
What Buyers and Sellers in California Need to Know Now
Home Buying
What 2025 Sellers Need to Know About Timing, Trends, and Getting Top Dollar in Today’s Market
Home Selling
Everything sellers need to know about home staging — from pricing and virtual options to the top-tier professionals I trust with my listings.
Arielle understands that buying or selling a home is an important decision that's about so much more than just the price tag, and she is fully committed to helping you achieve your real estate dreams, whatever they may be.