Twelve percent of the homes there have received some sort of foreclosure filing. Merced is third on the list at about 10 percent.
Fresno and the Visalia- Porterville area are also in the top 25. Many people still consider Merced ground zero for foreclosures.
But now that prices are more affordable and there are state and federal stimulus programs, home sales are picking back up. And some local realtors say the worst of the housing crisis is over.
Foreclosed homes can still be found all across Merced. In fact RealtyTrac reports nearly 8400 properties here received a foreclosure filing in 2009.
"It doesn't surprise me, just what I've seen since I've been here with UC Merced and the investors coming from outside, buying then losing, it doesn't surprise me," said Spence Boelter, Merced Homeowner.
Spence Boelter bought his home in 2007 and has watched its value plummet in the past few years. "It's not, maybe I don't know, might be worth half what it was when we bought it, so we don't feel real good about that," Boelter said.
But there are some signs that the market is improving. Realtor Andky Krotik said more people are having success selling their homes now than a year ago.
"It's typical that new homes on the market are shown within 2 hours of being listed and are usually in contract within 2-4 days after they're listed. It's not uncommon. In addition to that for houses to sell for anywhere from 13-15 percent over the list price," said Andy Krotik, Merced County Realtor.
But Krotik says that's largely because banks have artificially caused a lack of inventory as they face more government pressure to delay foreclosures. "In the past it would take 4 months, and now some are letting them sit there before they confiscate them for up to a year," Krotik said.
He says more than a thousand homes are sitting empty in Merced County, but most are not available to sell. That may also be part of the reason RealtyTrac says foreclosures in Merced only increased by one percent from 2008 to 2009.
"So that's good news in the sense that we saw many other metro areas that were continuing to see big increases in foreclosure activity in 2009, but we didn't see that in Merced," said a RealtyTrac representative in a phone interview.
Realtor Andy Krotik said he doesn't think the housing market has already hit bottom. But he expects to see more of a flat line in 2010 than a spike.
He also believes there will be many more short sales.
