You might consider expanding your criteria a bit. First, you may find some good deals that aren't short sales. Just owners having to compete against short sales in their neighborhoods. And don't rule out foreclosures. If a short sale fails, and a foreclosure occurs, then the bank owns it, and it comes back on the market. Buying a foreclosure isn't a piece of cake, but people I know (including a number of people who work the Maryland foreclosure market) say that foreclosures, in general, go quicker and more smoothly than short sales.
First, your agent's answer should be a question, which is, "What action is in your best interest?" As mentioned previously, if you don't "have to be" in home in a hurry, then it's hard to beat the value of buying a short sale, as long as you really know what it should be worth in the current market.
Use whatever resources you can drum up to determine which direction your area is heading. One of the last things to do is buy into a short sale in a neighborhood where values are still continuing to slide, probably due to the continue number of short sales...kind of a circular situation eh?
Best of luck,