Last I checked, there are at least 711 short-sale properties (all types) on the market from DC stretches down to Prince William county with price range from the low-$99k to $2.9 million. Not counting Maryland here.
Short-sale homes are not foreclosed yet. Kind of having a hanging-in-there status. This kind of sale requires the third party, that is the lender, for approval.
The problems with short-sale lie in the fact: 1) It takes forever to hear back from the lenders via listing agents and 2) Only a small percentage (really tiny sliver of the whole market) of short-sale homes actually got sold! In 2007, only 36 short-sale properties got sold vs. 5000 foreclosures vs. 34,596 non-distressed homes or the regular sales. (Think the data maybe a bit off, since I don't know exactly when MRIS started tagging the 'short-sale' properties)
The number two is the 'biggest' problem of short-sale.
It's easy if you have only one lender to deal with. But, what about lender/s holding second - and third trusts if any - since every little bit of mortgage loans is being sliced and diced? An easy way to explain the dilemma, via CNBC.
Lenders holding first mortgages get first dibs on borrowers’ cash or on the homes should people fall behind on their payments. Banks that made home equity loans are second in line. This arrangement sometimes pits one lender against another.
When borrowers default on their mortgages, lenders foreclose and sell the homes to recoup their money. But when homes sell for less than the value of their mortgages and home equity loans — a situation known as a short sale — lenders with first liens must be compensated fully before holders of second or third liens get a dime. [emphasis mine]
Since nobody knows their whereabouts, that's why it takes forever to hear back from the lender or listing agent. Without their approval, there won't be any sale.