The reason prices are up is because the amount of homes for sale has decreased to near shortages will there has been a steady increase in buyers. Demand is higher than supply which lends to price increases. The amount of foreclosures is up because the banks halted them last year. There is many vacant homes and owners who are over 1 year behind in payments that they now have to get the foreclosure done in order to complete the recovery of the market. The home in foreclosure tend to be in bad condition, much much worse than an owner occupied homes and most can not even be purchased by a buyer looking to live there because no one will give them a mortgage on it as it is in such poor condition. The home gets bought up by cash investors, they spend money fixing them, it improves the neighborhood, brings up values and then sells them to a new owner who gets a home like new at a good price. Prices will be affected up or down by the amount of buyers, when buyers decline, prices decline but when buyers increase, value increases.