The great thing about a "down" market is the buyer's are in the driver's seat. The bad thing is there's less pressure on prices, so you need to really know what you can get for a nice, redone property.
The easiest place to look is in the listed foreclosures the bank is trying to sell or the distressed property (short sales, probate & bankruptcies) owners are trying to sell. In a down market, they are probably going to discount more than in a recovering market. You can search this information on portals like Zillow.
There are specialty portals that will show you properties that are coming up for auction. In California, a bank must present any property it is foreclosing on to the public at an auction. If no one expresses an interest in the property at the auction it "goes back to the beneficiary (the bank). If any of the attendees identify themselves as interested, they have to show the auctioneer that they are holding funds equal to or in excess of the opening bid.
One other option is to simply drive around the area you are interested in and look for the worst kept houses. If you've got an agressive agent, they should have the resources to find the owners and reach out for you to see if they would like to sell.
CALL me TODAY! 909-567-6517 for more details on how to buy at foreclosure auctions.