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In the second quarter of 2010, 27 percent of all Idaho real estate sold was in some stage of foreclosure, according to the RealtyTrac online foreclosure information service, which trumps the overall national average of 24 percent.

The number of foreclosures on the market tends to discourage other Idaho homeowners who may typically have decided to put their homes on the market, because the lower price of Idaho foreclosures tends to drive the overall home value downward. Homeowners are afraid that by putting their home on the market, they may not be able to get full asking price – or even what their home would normally be worth in a non-distressed market.

An article on the Bankrate.com Mortgages Blog expresses concern over a housing market that has become so dependent on foreclosure sales to boost the overall health of the industry. Without the added foreclosures, more traditional Idaho real estate transactions would be occurring, which would improve overall market health. Instead, Idaho home buyers are looking for a deal, and deals aren't hard to come by in a market that's oversaturated with distressed mortgages.

Recent investigations into the legality of some foreclosures in many states have halted the foreclosure process, albeit temporarily. If findings indicate that some foreclosures in fact were not legitimate, we may see a drop in the number of foreclosures in the Idaho real estate market, although it's likely not going to be a large enough volume to make a significant difference.

The real estate market is notoriously cyclical in nature, meaning that it has historical patterns of up and downward trends, which always correct in time. The housing market turnaround will occur, but when and to what extent is the biggest question on many experts' minds.