In my monthly real estate update I usually spend much of the time discussing median selling prices and sales volume, but I don't find it pressing to talk at length about sales volume following a typical trend this time of year or that median selling prices continue to trend flat.

Instead, I want to discuss how important last month's statistics regarding short sales is.

I spend time every day researching trends and stats for our local area while also staying in tune with national news and reports. Over the last month I have seen reports showing that large banks have begun putting more emphasis on getting short sales completed. September's sales figures show that the same is starting to take place in the Seattle and Bellevue area.

Now, it's not often that short sales are talked about as positive factors in the real estate market. Heck, I've rambled on for months about the effect of distressed sales (short sales and foreclosure sales) on home values and the time it takes for real estate to get back to a traditional and healthy market.

So how could higher volumes of short sales be good for the market? Simple. To begin with, many bank owned foreclosure listings on the market were once upon a time short sale listings where the seller was unable to negotiate a short sale with their bank. Further, short sales typically sell at discounted prices, however they do not sell at the deep discounts foreclosures generally sell at. So, when banks put more emphasis on completing short sales it means we have fewer foreclosure listings that will come on the market at a later date. It also means that the same home that may have become a foreclosure listing will likely sell at a higher price than it would have as a foreclosure listing.

Bottom Line: September's uptick in the ratio of short sales to traditional sales points to a faster recovery because we will work through the "distressed inventory" more quickly. And not only will we work through it faster, we can do so by avoiding many of the foreclosure sales that are more damaging to home values. Prices have steadily held flat in the Seattle and Bellevue area, so fewer foreclosures sales and a faster recovery pave the road to traditional appreciation.

For the full breakdown of September's stats click on over to our Bellevue Real Estate Statistics and Seattle Real Estate Statistics pages.

- Robert E. Wasser - Seattle and Bellevue real estate market expert