Nationally, foreclosures are on the rise. According to RealtyTrac, 1.2 million homes were foreclosed in 2006—up 42% from 2005. The cities with the highest foreclosure rates were:

• Detroit
• Sacramento
• San Diego
• Las Vegas
• Dallas/Ft. Worth
• Cleveland
• Pittsburgh
• Houston
• San Antonio
• Minneapolis

The question remains, how many bad loans are out there in the marketplace? How many are going to fail? And how will that affect pricing in the coming year or two?

According to a subprime mortgage tracking site, 23 sub-prime mortgage lenders have gone bust (bankruptcy or closed their doors) since December. Twenty-three defunct subprime lenders in less than 3 months is NOT good news for the housing market. Other subprime lenders are no longer operating independently, after having been "rescued" (bought out at fire-sale prices).