Does the pre foreclosure discount survive foreclosure starts rising 20 percent when every investor gets the same list?

The discount in this strategy doesn't come primarily from the owner's ignorance of value. It comes from the owner's inability to transact any other way inside the time left. That's why competition compresses it less than you'd expect. Ten investors calling teaches the owner their house is worth 320. It doesn't produce a buyer who can close in three weeks with a lender payoff, junior liens cleared, and no financing contingency. The number of parties who can actually perform on a 5-week clock is small in any county, and it doesn't scale with the number of parties who bought the list.

Where compression does show up is in the easy files, meaning clean title, one lien, cosmetic rehab, decent neighborhood. Those get worked to a thin spread fast. What survives is the messy end, which is where rigging's HELOC example lives. So the effect of rising starts isn't a uniformly better market, it's a wider spread between the two halves of the list, and your acquisition cost per deal on the clean half goes up.

The number I'd watch instead of starts is the completion rate, meaning how many notices actually reach auction versus get cured, refinanced, or sold conventionally. Starts up 20 percent with a high cure rate is a much smaller pool of real sellers than the headline suggests, and cure rates move with home equity levels and with servicer behavior.

The risk you haven't raised is on the exit. Rising starts in a concentrated metro eventually means more distressed inventory listed in the same submarket you're reselling into, at the same time your carrying costs are running. Underwrite the resale at a price that survives that, and don't assume today's ARV holds through a 6-month rehab.