Foreclosure Discount Capitals: Best Cities to Beat the Bank

In the wake of the housing crisis, the number foreclosures has skyrocketed as depressed real estate prices and subprime mortgages continue to push millions of borrowers into default. As of Dec. 31, banks owned nearly 700,000 homes. Hordes more are on pace to join that enormous inventory, with 700,000 homeowners in some state of foreclosure.

Jumping nearly fourfold since the peak of the housing boom, foreclosure sales accounted for 20 percent of total sales in the country between July and September of last year. While the vacant properties represent loss and hardship for many, the massive supply might offer some current buyers the deal-of-a-lifetime.

In fact, according to data from RealtyTrac, on average, foreclosed homes sold for 34 percent below their market value between summer and early fall of last year. In some pockets of the country, that number was significantly higher. The foreclosure discount in Trenton, N.J., for example, clocked in at a staggering 67.89 percent.

Using data calculated by RealtyTrac, AOL Real Estate brings you a mix of houses in cities that offer some of the steepest foreclosure discounts in the country.

Click the gallery below to see everything from foreclosed mansions (pictured above) to first-time-homebuyer gems.

• <p> Location: Trenton, N.J.&nbsp;<br /> Average Foreclosure Discount: 67.8 percent<br /> <br /> Price: $198,500<br /> Beds/Baths: 3/2<br /> Sq. Ft.: N/A<br /> <br /> Trenton ranks No. 1 on RealtyTrac's list of cities with the steepest foreclosure discounts. <a href="http://realestate.aol.com/homes-for-sale-detail/82-Mark-Twain-Dr_Hamilton_NJ_08690_M64646-55853" target="_blank">This single-family</a>, whose price was slashed recently, represents one of the killer deals you can find in the city.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Trenton_NJ" target="_blank">See more foreclosed homes in Trenton, N.J.</a></p>
• <p> Dating back to the 1960s, this Cape Cod-style home offers three bedrooms and two baths. Judging by the average foreclosure discount of New Jersey, the home could be running as much as $150,000 below market value.&nbsp;</p>
• <p> Location:&nbsp;Atlanta&nbsp;<br /> Average Foreclosure Discount: 49.67 percent<br /> <br /> Price: $3.75 million<br /> Beds/Baths: 7/10<br /> Sq. Ft.: 22,000</p> <p> Foreclosed homes in Atlanta are selling for a staggering 50 percent off, according to data from RealtyTrac. This <a href="http://realestate.aol.com/homes-for-sale-detail/6025-Blackwater-Trl-Nw_Atlanta_GA_30328_M53708-45199" target="_blank">vacant Mediterranean</a>&nbsp;mansion offers a rather excessive four kitchens along with amenities that include a home theater, pool, spa, steam room and elevator.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Atlanta_GA" target="_blank">See other foreclosed homes in Atlanta</a>.&nbsp;</p>
• <p> With its gleaming double staircase, the foyer's richly finished, sparkling-clean interior contrasts with the scene at many foreclosed homes, which often show neglect.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Atlanta_GA" target="_blank">See other foreclosed homes in Atlanta</a>.</p>
• <p> At a whopping 22,000 square feet, the home's cavernous interior is distinctly palatial.<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Atlanta_GA" target="_blank">See other foreclosed homes in Atlanta</a>.</p>
• <p> Location: Houston<br /> Average Foreclosure Discount: 48.14 percent<br /> <br /> Price: $4.29 million<br /> Beds/Baths: 5/9<br /> Sq. Ft.: 12,129<br /> <br /> It may be hard to believe that $4.29 million is a below-market price, but given that this&nbsp;<a href="http://www.realtor.com/realestateandhomes-detail/5402-Doliver-Dr_Houston_TX_77056_M74317-83728?mlslid=78367414" target="_blank">stucco Mediterranean</a> is bank-owned and Houston's foreclosure discount approaches 50 percent, odds are that the home could be quite a deal for a well-heeled buyer.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Atlanta_GA" target="_blank">See other foreclosed homes H</a><a href="http://realestate.aol.com/foreclosures-listings/Houston_TX" target="_blank">ouston</a>.</p>
• <p> The home has a stone exterior and tile roof, along with a courtyard, pool and outdoor kitchen. The interior stretches 12,129 square feet.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Houston_TX" target="_blank">See other foreclosed homes in Houston</a>.</p>
• <p> After weaving around columns and through arched doorways, you reach the home's library or its fully-contained suite, accessible through its own entrance.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Houston_TX" target="_blank">See other foreclosed home for sale in Houston</a>.&nbsp;</p>
• <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> Location: St. Louis<br /> Average Foreclosure Discount: 54.61 percent<br /> <br /> Price:&nbsp;$89,900<br /> Beds/Baths: 3/2<br /> Sq. Ft.: 1,342<br /> <br /> This <a href="http://realestate.aol.com/homes-for-sale-detail/8520-Rosemary-Ave_Saint-Louis_MO_63123_M80719-22498" target="_blank">brick-built home</a>, which dates back to 1930, probably hit the market at a reduced price to begin with, but now is running even lower, having just undergone a price cut. The home offers stained-glass windows and wood flooring along with a spruced-up kitchen.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Saint-Louis_MO" target="_blank">See more foreclosed homes for sale in St. Louis.</a></p> </div>
• <p> Pictured here is the home's updated kitchen. The residence is even more of a deal if you factor in its purported HomePath Mortgage status. That means if you've got the right credit, you could snatch it for as little as 3 percent down.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Saint-Louis_MO" target="_blank">See more foreclosed homes for sale in St. Louis.</a></p>
• <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> Location: Lansing, Mich.&nbsp;<br /> Average Foreclosure Discount: 44.31 percent<br /> <br /> Price: $124,900<br /> Beds/Baths: N/A<br /> Sq. Ft.: 2,228<br /> <br /> Squeezed into a condo community, this <a href="http://www.realtor.com/realestateandhomes-detail/213-St-Joseph_Lansing_MI_48933_M37691-29897?mlslid=30126" target="_blank">historic home</a> stands out in the neighborhood because of its stately portico. The home has a long residential tradition, but could go commercial if the buyer so chooses: The house can serve as an office, according to the listing.&nbsp;<br /> <br /> <a href="http://www.realtor.com/realestateandhomes-detail/213-St-Joseph_Lansing_MI_48933_M37691-29897?mlslid=30126" target="_blank">See other foreclosed homes in Lansing, Mich.</a></p> </div>
• <p> The home's portico gives it a tinge of the pastoral era in which it was built. The classic was constructed in 1855.&nbsp;</p> <p> <a href="http://www.realtor.com/realestateandhomes-detail/213-St-Joseph_Lansing_MI_48933_M37691-29897?mlslid=30126" target="_blank">See other foreclosed homes in Lansing, Mich.</a></p>
• <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> Location: Grand Rapids, Mich.&nbsp;<br /> Average Foreclosure Discount: 43.45 percent<br /> <br /> Price:&nbsp;$289,900<br /> Beds/Baths: 4/4<br /> Sq. Ft.: 4,339<br /> <br /> You get a lot of bang for your buck if you buy &nbsp;<a href="http://realestate.aol.com/homes-for-sale-detail/6412-Grenelefe-Dr-Se_Grand-Rapids_MI_49546_M38743-14686" target="_blank">this four-bedroom contemporary</a>. Located on a cul-de-sac, the home spans a generous 4,339 feet and offers a three-car garage. At under $300,000, that makes it an affordable luxury residence. &nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Grand-Rapids_MI" target="_blank">See more foreclosed homes in Grand Rapids, Mich.&nbsp;</a></p> </div>
• <p> Along with its expansive interior, the home also boasts its own heated greenhouse, along with a theater and office.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Grand-Rapids_MI" target="_blank">See more foreclosed homes in Grand Rapids, Mich.&nbsp;</a></p>
• <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> Location: Flint, Mich.&nbsp;<br /> Average Foreclosure Discount: 21.55 percent<br /> <br /> Price: $109,600<br /> Beds/Baths: 4/3<br /> Sq. Ft.: N/A<br /> <br /> Purchase a foreclosed home in Flint and you're likely to enjoy the benefit of more than 20 percent off. While the city's foreclosure inventory doesn't offer deals quite as striking as those found in some other cities wracked by the housing crisis, the town's average foreclosed-home price still falls far, far below the national median (which hovers above $200,000). Flint's average foreclosed-home price is just $60,578. This <a href="http://realestate.aol.com/homes-for-sale-detail/1265-Mill-Creek-Rd_Flint_MI_48532_M39590-10268" target="_blank">well-landscaped home</a> demonstrates how far just $110,000 gets you.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/homes-for-sale-detail/1265-Mill-Creek-Rd_Flint_MI_48532_M39590-10268" target="_blank">See more foreclosed homes in Flint, Mich.&nbsp;</a></p> </div>
• <p> The home may be a bit bare-bones now, but as the listing asserts, the home has &quot;lots of potential.&quot; It comes with a pool, a deck and a two-car garage.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/homes-for-sale-detail/1265-Mill-Creek-Rd_Flint_MI_48532_M39590-10268" target="_blank">See more foreclosed homes in Flint, Mich.&nbsp;</a></p>
• <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> Location: Tampa, Fla.&nbsp;<br /> Average Foreclosure Discount: 24.97 percent<br /> <br /> Price: $143,900<br /> Beds/Baths: 6/4<br /> Sq. Ft.: 2,920<br /> <br /> At just $49 per square foot, this <a href="http://realestate.aol.com/homes-for-sale-detail/113-W-Gladys-St_Tampa_FL_33602_M63000-11833?ex=FL534912150" target="_blank">cheery home</a> in Tampa, Fla., a city that took has taken a real shellacking from the housing crisis, offers of six bedrooms.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/homes-for-sale-listings/Tampa_FL" target="_blank">See more foreclosed homes in Tampa, Fla.</a></p> </div>
• <p> The bank-owned property spans nearly 3,000 square feet and boasts a well-equipped kitchen with cherry-stained cabinetry and marble countertops.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Tampa_FL" target="_blank">See more foreclosed homes in Tampa, Fla.</a></p>
• <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> Location: Easton, Pa.&nbsp;<br /> Average Foreclosure Discount: 41.17 percent<br /> <br /> Price: $29,900<br /> Beds/Baths: 3/1<br /> Sq. Ft.: 1,556<br /> <br /> Alright! A listing description that levels with you. &quot;This is a property that needs some work,&quot; it states. The home is not without its virtues, however: It offers ample space, three bedrooms and an attic. Furthermore, buyers can acquire 3 percent buyer's assistance if they make an offer by the 31st of this month.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Easton_PA" target="_blank">See more foreclosed homes in Easton, Pa.</a></p> </div>
• <p> One thing buyers should watch out for if they think about shelling out for these digs is that, as with many other foreclosures, there is no seller disclosure for buyers interested in this home. That means, unless you pay for a thorough inspection, you could discover hidden flaws after purchasing the place.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Easton_PA" target="_blank">See other foreclosed homes in Easton, Pa.&nbsp;</a></p>
• <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> Location: Chattanooga, Tenn.&nbsp;<br /> Average Foreclosure Discount: 40.39 percent<br /> <br /> Price: $129,000<br /> Beds/Baths: 3/2<br /> Sq. Ft.: 1,456<br /> <br /> <a href="http://realestate.aol.com/homes-for-sale-detail/2402-Jenkins-Rd_Chattanooga_TN_37421_M77123-29722" target="_blank">This staid but cozy home</a> is running for $129,000, about $40,000 over the average foreclosed home price in Chattanooga. The home offers a nice porch and decently finished interior.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Chattanooga_TN" target="_blank">See more foreclosed homes for sale</a>.&nbsp;</p> </div>
• <p> Pictured here is the home's open dining-kitchen area. The place seems to be in pretty good shape for a foreclosed home. Many fall into poor condition, succumbing to insect infestations or other symptoms of neglect.&nbsp;<br /> <br /> <a href="http://realestate.aol.com/foreclosures-listings/Chattanooga_TN" target="_blank">See more foreclosed homes in Chattanooga, Tenn.</a></p>
• <p> </p> <div style="font-size: 10pt; line-height: 12pt; "> <p> Find&nbsp;<a href="http://realestate.aol.com/blog/homes-for-sale/" target="_blank">homes for sale in your area</a><br /> See&nbsp;<a href="http://realestate.aol.com/blog/gallery" target="_blank">more&nbsp;<em>AOL Real Estate</em>&nbsp;galleries</a><br /> <br /> GALLERIES:<br /> <br /> <a href="http://realestate.aol.com/blog/gallery/surreal-estate-weird-wonderful-homes/" target="_blank">Weird, Wonderful Homes</a><br /> <a href="http://realestate.aol.com/blog/gallery/monster-houses/" target="_blank"><br /> Monster Houses</a><br /> <br /> VIDEOS:<br /> <a href="http://realestate.aol.com/blog/category/my-next-move" target="_blank"><br /> My Next Move: Homebuyers Share Their Stories</a><br /> <a href="http://realestate.aol.com/blog/2011/08/22/is-that-house-worth-the-asking-price-video/" target="_blank">Is That House Worth the Asking Price?</a></p> </div>

Also see:
Report: Foreclosures Down, But Discounts Abound
Open Houses of the Week: Jan. 27-29

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