Would that be the foreclosures and NOT’s and NOD’s?

Yes it would be that and short sales. Watch days on market, both for distressed properties and the general market. What you really want to see is how are the distressed properties fairing in the market along with the other observations.

“How can I gather the correct information to start tracking this information by zipcode?”

Without a subscription to the mls or other data source it isn’t simple to do. It can be done though. I believe? I cant explain it though because I take the simple route called the MLS.

In any case, the idea is to get your finger on the pulse of the market.
Take Temecula for instance. That is a good area to watch for learning purposes because it is already facing more drastic price declines in response to distress. The deals look good by comparison to 6 months ago, a year ago and beyond but the numbers are not showing any possiblity that those deals are going away anytime soon or even that the declines are over with.There are several posters here who are doing for Temecula what you want to do for other areas.

In most ,if not all San Diego areas, we have bad and worsening numbers but less of a capitulation on prices. All indications are that prices will continue to decline, pretty broadly speaking, before they get better. Most people are of the opinion that “nicer” areas closer to desirable locations like beaches and jobs,like CV, will get hit last. There tends to be less agreement on how hard they will get hit pricewise.