Assessments in Lynn are based upon January 2007 values. Obviously there's no relationship between the assessed value and the real market value. Don't even consider that in the quotient.
Short sales can take two to four months (some even longer) to get a response to your offer, and you may find it countered by the lender at a price even higher than the listing price when you do hear from them.
The listing price is simply a point at which their listing agent believed they may get an offer from a preapproved buyer. It does not obligate anyone to anything. I truly believe the best values out there ARE short sales, but you have to be willing to take the risks that result in the savings. Try to make sure your offer contract is structured to not lock you in to the process if the wait becomes too uncomfortable for you or if you find another property in the mean time that interests you more.
A good buyers' agent will be able to provide you with sold comparatives to justify the price you are paying as well as considering the under agreement properties in MLS and the actives. They should be able to put together a coherent analysis using those three tables of information to justify your offer amount. The rental market is not as good as it was three years ago, but then there are also a lot of rental units off the market because of foreclosures to make it more competitive.
Lynn, as a market worthy of investment, is a great opportunity. We are only 7 miles from downtown Boston, surrounded by some of the wealthiest communities in New England. Our prices are traditionally among the lowest in the state, but the potential upside is always lurking around the corner depending upon gas prices, public transportation improvements, etc. And our public high schools have again been written up in US News and World Report as among the best in the country.
Not bad for a city with a decades old bad reputation among the outsiders!