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Just like celebrities in rehab and the latest saga of the Spears family, it is nearly impossible to escape the media’s seemingly unending coverage of foreclosures and the volatility in the housing market. This month’s Trulia Trends Report (PDF) puts foreclosure* data into perspective for the current market, and highlights five markets that may have hit the bottom.

In the above graphic, we looked at the median list price of homes for sale on Trulia and the median list price of foreclosure homes in a given region. The data suggests that buyers in the South and Mid-Atlantic have the strongest negotiating power, while sellers in the Midwest who aren’t on a deadline should wait it out for now.

The data also shows that recovery might be on the horizon for five cities: Albuquerque, Queens, Memphis, Tulsa and St. Louis. This is based on stable inventory, and flat to increasing median list prices quarter over quarter. Tulsa and Memphis are leading the pack with list prices up by eight and five percent, respectively.

Finally, the report spotlights California foreclosures, echoing economists’ forecasts that the state’s rising tide of foreclosures will continue to dampen hopes for a real estate market recovery.

The chart above shows the ten cities in California with the most listings in Jan and compares foreclosure prices vs. list prices. We found that sellers in LA, San Francisco and San Diego may have a long wait ahead of them, as the median price of REO homes in those cities is lower than the median list price of non-REO homes by 19%+. Potential buyers on Trulia are watching all three cities closely, as all were ranked in the top ten most popular cities in January.

*All REO data powered by RealtyTrac.

Get the full report here (PDF). Want to receive the full report every month in your email? Sign up for it here.

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