basically it depends if short sales and foreclosures are dominating the market in your area. If all teh sales are only foreclosures and short sales then yes they are dictating your valuye. If there is aonly 1 short sale among several other market priced sales non foreclosures then it will not affect the value per say. you really need a current bpo or appraisal to klet you know what type and how much similar homes are selling for in yoru area. good luck with your sale

You are getting many good answers here that you should take in consideration. I will say this as I have to all my sellers. When a short sale comes up in your area, I would not lower my home price just because of the short sale. We don;t want to compete against those. Unless you are in a desperate quick sale position.. then you have been already too high.... It is not likely that your home will be lowered in value at appraisal because of the short sale. Consider the homes sold not in distress before you lower your price. If you wait out the short sale, .. As soon as it is sold the stress on your home value will be relieved. Allow your realtor some time to market also if the short sale stresses pricing in your area also. Don;t blame the realtor for not selling. Marketing the property is important and when stressful market changes are inherent like short sales they are short lived... If the short sale property is in bad condition don't even worry about it. You realtor will advise you as your questions come along. Just because one rat leaves the ship doesn't mean the ship is sinking...
Always price it right... and it will be sold. I as a realtor will show and sell non short sale properties before the short sales. Mainly because the short sales will take longer to sell and there are more problems are associated with them also. Unfortunately values lower due to stressful changes, but not in drastice overnight plunges as you may feeling right now.
Make your house look more sale-able... Paint a picture on the outside to get them inside... make it inviting and clean looking picture perfect.
Ask yourself are you getting showings? Are you getting feedback? positive negative take the feedback into consideration... If your home is the highest in the area ask your self why? because you have to sell at that price to get out, then you have a problem. Is your house better than the others? how is it better. Would you honestly pay more for your house than all the others....?
Use your best judgment , but don' be afraid of a short sale unless you are in a terrible position of needing to sell yesterday. The stress a short sale puts on a neighborhood is detrimental but is short lived if there is not a panic by the sellers... Many short sales in an area will stress values, but not 1 or 2 or even 3. As they sell values will likely snap back, it's the panic that causes value fluctuations.
Good luck..

I sell locally in Monmouth County. As an agent, when I search for comparables, if something looks way out of range for the current market, I call the listing agent and find out why it sold where it did. The agents are always very honest about the condition of the house and the terms of the sale. Many of the short sale/foreclosure properties are in horrible condition when they close. And finding value for a new listing has not only to do with sales prices, but you have to take into consideration the condition of the homes that sell. Some may seem to be comparable, but they are not. While I wouldn't say that distressed sales have no affect on the market, I believe there is more to the picture than the closed price and an agent who does a thorough job will be able to adjust prices accordingly.
That being said, if your neighbor's home is a distressed sale and the conditions are comparable, the amenities are comparable, the lot size, too--you will have a difficult time trying to convince the buyers to pay more for yours.

Short sales and foreclosures are creating an impact on the real estate market in many ways. One of the biggest factors is their sales are and will continue to create the "new pricing for real estate." Each one of these homes that sells will become a future comp to be used by banks in determining what properties will appraise for.

Siince the majority of buyers borrow and finance a large portion of their home debt, they will need to depend on having their chosen home appraise for the sale price. Like it or not, we are stuck with the trend that is taking shape and make no mistake...even if you price your home higher and find a buyer, unless the buyers are paying cash, you will still be left with.....will it appraise or won't it.

BG,

Lets say you were buying a car, a blue honda accord with just the basics. The dealer has two similar models; a dealer demo selling for 25% less than the one you came in for. Would you purchase the less expensive one? That is the questions you will be asking or potential buyers of your home when compared side by side to your neighbor.

Now lets say that for close to the same price you have a brand new car and the dealer demo, which would you choose? This is the question you want buyers compaing your homes to ask themselves.

Your selling price is very much affected by your neighbor. Not because it is a foreclosure, but because (I assume) it is being sold at a value price. In order to generate potental buyers you need to also value price your home, remember your prime objective is to SELL your house.

Good Luck,

Roy

If your home is in prime condition, is available to show and shows well, and is priced right you shouldn't have a problem.

You'll run into problems if the short sale home is in reasonable shape and yours isn't in GREAT shape. Consider staging your home, making it clear that you are providing all the certifications (CO etc), and you might consider offering a home owners warranty that can transfer to the buyers.

In my area, short sales are not used by appraisers for mortgage company approvals.

Short sales are taking their toll - sometimes the homes are in disrepair but just as often this is not the case. The goal is to sell quickly and the price reflects that - generally the goal is a 30 day window and at a time when most everything in every market is taking more than 6 months on average to sell, that is a difficult task.

As short sales close they become sold statistics that are drawn on by appraisers in setting value for other properties as mortgages are evaluated. This is how I see short sales affecting the market most - because there is a shortage of sold data and so the appraiser will pick these up - and rightfully so - and unless there's good reason for the difference in price - ie, lot size, home improvements, home size, then the short sale price will drag your value down.

Good luck to you - without question, the most important thing for you to do is price your home right from the get go. While the probability of selling in 30 days in unlikely, it is certain that the greatest excitement for your home will be when it is new to the market - so take a deep breath and price properly so you don't miss the opportunity this window creates.

Best,
Jeannie Feenick
Search and connect at http://www.feenick.com