If you buy a property below its current market value, that should make a great investment. The question to ask is; If the purchase of a property in foreclosure is below the current fair market value.  The prices of foreclosure properties may be low relatively to some past measure of the market, but are they worth your time and money?       

The answer is:  YES!  Let’s be clear though…..Ways to make money would be:

1. To make improvements and resell
2. Simply to hold until the market strengthened and then resell.
3. To rent the property and make a profit from operating it as a rental investment.

Note:  You can do all these things with properties that are not foreclosures, too!

Even though the sellers (banks) of foreclosed properties are like any other sellers in that they want to get the highest price possible, there is an important difference between a seller of a foreclosure and other sellers. Typically banks who sell foreclosed properties have to sell, while others may want to sell, but also have the option of pulling back from the market and waiting for a better selling environment. Faced with this need to sell, even if the market is soft, banks have to keep pushing prices lower until a buyer emerges. 

Conclusions: In a market dominated by foreclosures, prices in general may be temporarily depressed, and would represent a buying opportunity for any property, not just those that are foreclosures.