"The market is not healthier because there are more short sales," Bartos said. "Instead it's an indication that lenders would much rather see borrowers pursue that option than foreclosure. It's still indicative of a distressed market as both are distressed sales."
The reason for Bartos' pessimism?
"There are still too many delinquent mortgages. State lawsuits and government intervention has prevented many homeowners from being foreclosed upon despite no payments being made for years in some cases," he said. "(Bank-owned) inventory that we would have seen is not entering the market as lenders look to foreclosure as a last resort."
While avoiding foreclosures is a good thing, Bartos said, it won't be until the area sees "substantive declines in foreclosure filings combined with a decline in distressed property selling, which includes short sales and (bank-owned sales), then perhaps a case might be made to say that the broader market is improving.