http://www.dsnews.com/articles/foreclosureradar-foreclosure-sales-down-in-western-states-2012-07-12 While WA isn't listed here, we never hit the top states for foreclosures, the signs of the western portion of the US stabilizing is good news. Right now, we are tracking very similarly to the same market changes as CA, which in many marketplaces means we're back to a seller's market right now due to lack of inventory being available. Demand is still high because rates are so incredibly low (below 4%!!) and prices have made buying more affordable.
One other reason for the shift may have to do with the fact that banks have been slowing down their foreclosure processes in many states to mitigate the number of homes going into their REO inventory and to allow for them to continue taking advantage of new business in the mortgage industry. They can only lend so much and lots of REO's on the books limits their ability to do new loans.
There was a shift in our marketplace in Puget Sound starting in April 2011. Lack of inventory has made a lot of the difference for us and with 30-40% of homeowner's still being underwater on their homes, we'll see this trend for a while.