Foreclosures in a neighborhood can have a ripple effect on nearby property values. They often sell at discounted prices, which can drag down the value of surrounding homes when used as comparables in appraisals. Additionally, foreclosed homes may sit vacant for extended periods, potentially falling into disrepair and negatively impacting the neighborhood's overall appearance. This can create a cycle of declining property values in the area. An experienced realtor can take into account the effect of any foreclosures in your area.