Interesting reading, and a good news/bad news report. Bad news is foreclosures and short sales are still accounting for a sizeable chunk of market activity – this will put further pressure on prices. Good news is that the for sale inventory is dropping across the spectrum – this supply/demand ratio is still not balanced, but it is trending in the right direction.
Short sales, in my mind, are sort of the first resort for someone who must (whether due to income disruption, relocation, whatever) move, yet cannot afford to do so because they owe more than the home is worth.
It will be interesting to see how many of these potential short sales wind up as actual sales, versus those that are unsuccessful and eventually go into foreclosure. In other words, a high number of proposed short sales could be a precursor for more pain to come in the housing market.