The number of what\u2019s known as short sales jumped when the Great Recession hit in 2008 and continued to climb, finally peaking in 2012<\/a> when the transaction made up 9% of the nation\u2019s housing market, according to Realtor.com.<\/p>\n A new report<\/a> by the National Association of Realtors website found that in 2025, the share of short sales represented 0.6% of all conventional closings and 28% of distressed home sales, with fewer than 30,000 total.<\/p>\n But short sales<\/a> have been increasing recently, rising 4% from 2023 to 2024, and 10% between 2024 and 2025, the site said, noting that in the past four months, those transactions went up 16%.<\/p>\n \u201cToday, short sales are a small corner of the market, but a growing one,\u201d Glen Morgenstern, a Realtor.com economist intern and author of the report, said, part of what he called a broader rise in all types of distressed sales now that COVID-19 pandemic assistance is gone.<\/p>\n What are the hot spots for short sales?<\/p>\n The report identified the 10 midsized and mid-priced U.S. housing markets with the highest concentration of short-sale homes for sale in May. Here are the markets labeled the nation\u2019s \u201cShort Sale Hot Spots\u201d with the percentage of short sale listings.<\/p>\n Lakeland, Florida, 6.7% Colorado Springs, Colorado, 5.8%Putnam, Connecticut, 5.6%Pueblo, Colorado, 5.2%Vallejo, California, 4.5%Shelton, Wyoming, 4.1%Olympia, Washington, 3.9%Yuba City, California, 3.8%Waterbury, Connecticut, 3.7%Battle Creek, Michigan, 3.6%Are Utah homeowners in danger of being underwater?<\/p>\n Utah may not have made the list, but there still may be cause for concern. What\u2019s described as the Salt Lake City-Murray metropolitan area had a 1.8% share of short sale transactions in 2025, according to the report, up 12.2% from 2024. <\/p>\n The Salt Lake City-Murray metro \u201chas a high and growing share of transactions that come from short sales,\u201d Realtor.com Senior Economist Joel Berner told the Deseret News Friday. <\/p>\n \u201cThe surge of purchases in SLC in recent years and the more recent retreat of home prices there put some recent buyers in danger of being underwater (owing more on their loan than their home is worth),\u201d Berner said. \u201cThis is a scenario that often leads to short sales.\u201d<\/p>\n Utah also has the nation\u2019s highest short-sale-to-foreclosure ratio, about 3.3 short sales every every foreclosure sale, Morgenstern said, adding that only Idaho\u2019s ratio comes close, at 2.9. Most states, he said, had a ratio below 1. <\/p>\n \u201cWhat has changed recently in Salt Lake City is the pace. Homes take about a third longer to sell than three years ago, and inventory is higher,\u201d Morgenstern said. \u201cIn a fast market, an owner in trouble simply sells and moves on.\u201d<\/p>\n But, he said, ” as the market slows, the buyers who stretched the most, those who bought near the 2022 peak with little money down, have the least cushion to absorb selling costs, and some of them end up short.”<\/p>\n \u2018They overpaid for their homes\u2019<\/p>\n What the \u201chot spots\u201d markets have in common is a rapid rise in prices after 2020 amid the nation\u2019s pandemic home buying frenzy<\/a>, and then a decline in demand as inventories soared. In Lakeland, the number of homes for sale shot up 60% over three years.<\/p>\n With prices remaining stagnant or even dropping, \u201cthat is enough to leave owners who bought near the peak owing more than the home is now worth, the precondition for a short sale,\u201d Morgenstern said.<\/p>\n The hot spots highlighted all \u201cskew toward short sales, not just distress in general,\u201d he said. \u201cIn May, Lakeland had about three and a half short sales for every foreclosure listing, Pueblo roughly six to one, and Putnam, a small market, had eight short-sale listings and no foreclosures at all.\u201d<\/p>\n Brian Stephens, a Lakeland real estate agent, told Realtor.com that home prices in the Central Florida city have stalled over the past two years even as insurance rates and homeowners fees in the state are going up<\/a> much faster than other parts of the country. <\/p>\n About one out of every seven homes for sale in the U.S. is in Florida, according to recent analysis <\/a>by Parcl Labs that also found nearly 45% of listings in that state have taken a price cut, with 1 in 10 homes selling for less than the owner paid.<\/p>\n In Lakeland, homeowners who bought in 2021 through 2023 account for \u201cmost of the people in trouble,\u201d Stephens said. <\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/07\/VWBFQA5CCZA2RIFA64X466OORM.JPG\")
A for-sale sign stands in front of a home in Herriman on Tuesday, May 12, 2026. | Scott G Winterton, Deseret News <\/p>\n