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Foreclosures Are Rising… But Not for the Reasons You Think

Foreclosures are up in Surrey and across the Lower Mainland.That part is true.But the narrative around why they’re happening?👉 That’s where things get completely off track.So let’s break down the actual data and what’s really going on.

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The Numbers (Real Data, Not Headlines)

Across the Lower Mainland:

• ~28,500 active listings
• ~82 active foreclosures
• ~40 foreclosures sold in the last 6 months

Total foreclosure-related listings:👉 ~120–140That means:👉 ~0.3% of listings are foreclosures

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First Reality Check

Yes:

• Foreclosures are increasing
• I personally have more foreclosure files than ever

But also:👉 They are still a tiny percentage of the market

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Why They Feel Like They’re Everywhere

Two reasons:

• They were basically non-existent for 10+ years
• I (and others with relationships) are seeing more of them directly

So it feels like:👉 “They’re exploding”When really:👉 They’re just returning to normal levels

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Why Foreclosures Disappeared (2015–2022)

Simple:

• Prices were rising fast
• Anyone in trouble could just sell
• Most people walked away with equity

So instead of foreclosure:👉 They exited cleanly

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Why They’re Back Now

That escape hatch is gone.Now:

• Prices have dropped
• Equity is thinner (or gone)
• Selling isn’t always an option

So instead:👉 Foreclosures are happening again

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The Biggest Myth: “It’s All Mortgage Fraud”

You’ve heard it:

• “It’s all Surrey mortgages”
• “It’s all fraud”
• “It’s concentrated in one area”

That’s not what the data shows.

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What the Map Actually Shows

Foreclosures are:

• In Vancouver
• In Burnaby
• In Richmond
• In Surrey
• In Abbotsford
• Even in West Vancouver

👉 Including some of the wealthiest neighborhoodsThey’re spread out.Not concentrated.

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What’s Actually Causing Foreclosures

From what I’m seeing:

• A portion: peak buyers (2021–2022) who overpaid
• A portion: people who never should’ve qualified
• A portion: long-time owners with other financial issues
  • Business losses
  • Lawsuits
  • Over-leveraging

👉 It’s not one thingIt’s a mix.

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The Most Interesting Pattern

There is some clustering:👉 Along transit / investor-heavy areasLikely:

• Pre-sale investors
• Condo-heavy zones
• SkyTrain corridors

That’s where pressure shows up first.

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Are We at “Record Highs”?

No.Let’s be clear:

• Not record highs historically
• But much higher than the past decade

Why?👉 Because the last decade was abnormal

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What Happens Next

There will be:

• More foreclosures
• More listings tied to financial stress
• More opportunities (and risks)

And importantly:👉 The foreclosure process is changing againBack to:

• Courtroom bidding
• Sealed offers
• More risk for buyers

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Should You Buy Foreclosures?

Some people should.Most people should not.Why?

• Legal complexity
• Limited protection
• High risk if you don’t understand the process

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Final Takeaway

Foreclosures are:

• Increasing ✔️
• Real ✔️
• But not widespread panic levels ❌

They are:👉 A normal part of a down cycle returningNot a collapse.

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The Real Truth

If you zoom out:👉 The market is correcting
👉 Leverage is being exposed
👉 Risk is being repricedAnd foreclosures are just:👉 One piece of that puzzle

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Written by:
Steve Karrasch PREC
Karrasch Real Properties Team
Macdonald Realty