For the First Time in Eight Years, a Short Sale Beats a Foreclosure on Price

Something crossed over in January that had never crossed before, and it went by almost unnoticed.

For most of the last decade, a house sold through a short sale went for a deeper discount than the same house sold out of foreclosure. That was just how it ran. Foreclosed homes moved in a fairly steady band, somewhere between 25 and 30 percent below what they were estimated to be worth, year after year. Short sales swung much wider and usually landed worse. About 30 percent below in 2018. Out to 50 percent below in 2022. Back in to roughly 20 percent by the start of this year.

Then the lines met. Realtor.com published a short sale study on July 16 that measured it: a distressed home now brings in roughly 9 percent more of its estimated value as a short sale than it does as a foreclosure. First time that’s been true since they started tracking it in 2018.

If you’re behind on a payment in Jacksonville, or anywhere in Florida, that’s a real number and it’s worth having. It’s also probably not the thing that’s going to decide anything for you, and I’d rather say that up front than sell you a headline.

Short Sales Didn’t Get Better. The Market Stopped Running Away From Them.

The reason for the flip is timing, not anything about the deals themselves.

A foreclosed home gets priced by the lender at the moment it sells. Whatever the market is doing that week, that’s the market it’s priced into. The discount tracks in real time.

A short sale gets priced much earlier, while the homeowner still owns the house. Then it sits pending for months while the lender decides. Through the fast price run-up of 2021 and 2022, the market simply outran those slow deals. By the time a short sale closed, the number on the contract was from a different market, and the discount blew out to 50 percent.

Price growth flattened through 2025 and into 2026. The lag stopped costing anything. The discount snapped back.

So nothing improved about short sales. The thing that was punishing them went away.

The 592 Days

Realtor.com asked the question that follows from their own finding, which is why short sales stay rare if they now bring the better price. Glen Morgenstern, an economist intern there, answered it without dressing it up:

“A short sale recovers more value for the lender and does less damage to the surrounding neighborhood, but the decision isn’t the lender’s to make. The homeowner controls the outcome, and a foreclosure lets them stay in the home without paying for 592 days on average. That free housing is worth more than any credit or timeline advantage a short sale offers, and the new pricing math doesn’t touch that calculation.”

That’s the whole thing in one paragraph, and it’s the most honest sentence in the study.

The price argument for a short sale just won for the first time in eight years. It’s still not the argument that wins the conversation, because on the other side of the table is 592 days of living in the house without making a payment. Nineteen months. For a household with nowhere obvious to go and no cash to go there with, that isn’t a technicality. That’s the roof.

I’m not going to pretend that math doesn’t exist, and I’m not going to tell you which side of it you belong on. That’s yours to weigh, and the pieces of it that actually matter, what you’d owe afterward, what it does to your taxes, what it does to your credit, are questions for an attorney and a CPA. I’m neither one.

How Small This Still Is

Worth keeping the scale straight, because the direction of a number and the size of it are two different things.

Fewer than 30,000 short sales happened in the entire country in 2025. That’s about 0.6 percent of all arms-length home sales, and 28 percent of distressed sales. They trail foreclosures by better than two to one, and the ratio has settled at roughly four short sales for every ten foreclosures. It has never once reached parity in twenty years of records. It climbed when the HAFA program pushed short sales as an alternative starting in 2010, then slid back after that program ended in 2016.

The direction is up, though, and it’s been up three years running. Short sale transactions rose 4 percent from 2023 to 2024, close to 10 percent from 2024 to 2025, and about 16 percent year over year in the first quarter of this year.

Florida Sits in This Differently Than You’d Guess

Here’s the part that surprised me. The map for short sales is not the map for foreclosures.

By share of listings, Lakeland, Florida leads the whole country at 6.7 percent. Pueblo and Colorado Springs, Colorado come next. By raw count of short sale listings as of May, Miami and Tampa sit in the same group as New York, Phoenix and Houston.

But measured by completed sales, short sales are most common in Salt Lake City and in Texas metros like Austin and Dallas. Listed in one place, closing in another. That gap between what gets listed as a short sale and what actually closes as one is its own story, and it lines up with something else in the study I’ll get to below.

Foreclosures concentrate in the most affordable markets. Short sales scatter across moderately priced metros in the West and in Florida. Two different pressures producing two different maps.

Meanwhile the Clock Is Getting Shorter

ATTOM’s Mid-Year 2026 report came out the same day, July 16. Properties that completed foreclosure in the second quarter of this year had been in the foreclosure process an average of 563 days. That’s the lowest since 2013, down 2 percent from the previous quarter and down 13 percent from a year ago. Seventh quarterly drop in a row, by ATTOM’s own count.

Two things about that number.

It is not the same number as the 592 days above, and the two should never be put next to each other and subtracted. ATTOM is counting days in the foreclosure process for homes that finished it. Realtor.com is counting time living in the home without paying. Different definitions, different publishers, different things being measured.

What they agree on is direction. The window is closing faster than it used to. ATTOM doesn’t publish a Florida-specific timeline in this release, so I’m not going to invent one for you. What ATTOM does publish for Florida is 27,494 foreclosure filings in the first half of 2026, one in every 373 housing units, up 32.65 percent from a year ago. Worst rate of any state in the country.

If You Do Go Down This Road, Two Things to Expect

The same study has two findings that don’t make anybody’s headline and matter more than the 9 percent does.

Short sale listings draw roughly 20 percent fewer page views on Realtor.com than comparable homes. Buyers see the words and scroll. And they take about two months longer to sell, weighed down by lender approval timelines that can drag out and sometimes fall apart before closing.

So the better price comes with a thinner buyer pool and a longer wait, on a file that already has a clock running on it. Whether that trade is worth making depends entirely on how much time you actually have, which is different for every household.

And no lender is obligated to approve any of it. That decision is theirs, every time, and anyone who tells you otherwise is telling you something they can’t know.

Where That Leaves Your Options

Same list it’s always been. A crossover in a pricing study doesn’t add or remove anything from it.

A regular sale, if there’s enough equity to cover the loan plus the cost of selling. A short sale, which needs your lender’s sign-off and comes with no guarantee of it. A deed in lieu. Loss mitigation with your servicer, which might come back as a modification or a repayment plan. Or letting it run to foreclosure.

Each one lands somewhere different on your credit, on your taxes, and on what you might still owe when it’s finished. Florida is a recourse state, so a lender here can pursue a shortfall in ways it can’t everywhere. And the tax exclusion on forgiven mortgage debt expired on January 1 of this year, which moved the tax side of this for a lot of people.

What the study actually gives you is one fewer bad reason to rule a short sale out. For years, if somebody told you a short sale meant taking a worse price than a foreclosure would get, they were right. As of this January they aren’t. That’s the whole of it. It’s a small correction to one input, and it sits alongside everything else you’re weighing.

Falling behind is usually life landing hard on somebody who was doing fine a year ago. A pricing study doesn’t change that and it isn’t meant to. It just moved one number that a lot of people had wrong.

I work out of Jacksonville and distressed property is most of what lands on my desk. If you’re outside Florida, my license doesn’t travel, so those go out through the SFR referral network to somebody whose does.

Ask me whatever you want to ask. JimArmstrong904@gmail.com, or (904) 671-4161 if you’d rather talk than type. Nothing on the other end of it but an answer.

Jim Armstrong, REALTOR, Momentum Realty. SFR (Short Sales and Foreclosure Resource) certified. This is general information, not legal, tax, or financial advice.

Momentum Realty is not associated with the government, and our service is not approved by the government or your lender.