The values have not risen much due to nature of these sales. Take 95136 neighborhood for example, both short sale and reo sale comprise of 52% of total sales. They are left over distressed property inventory. Sellers goal is making the schedule avoid foreclosure date, price is secondary. What shows up is a fairly impressive STEADY PRICE as before.
Last 30 days in San Jose there were 396 sfh on the market, 1 year prior 675, 2 years ago 792...
With a DOM of only 20 days for both SFH and TH/condo there is much competion with what is left
on the market. The inventory is just ~2 months. Recalling we had 14 months of inventory not long ago while buyer would still fight over some desireable homes with many many many offers in the midest of a worst recession.
To find more listings there got to be more sellers. With a notice of default dropped ~40% from last quarter 2011 now only at 1.1%. One will not expect any quantity of foreclosed homes. There will still be short sales. As for those under water, I expect more will unload them as loss. Expecting home ownership is like owning a used car. It depreciates. Silicon Valley used to be like so in the 1960s after owning home for 5 years my parents made $1K profit. Selling homes these days many take a loss and stop bragging. In 95136 44% home owners lost $. Last year 33% of San Jose home owners sold at loss, and 14% home owners are still under water.