I see it every day with Short Sales – a buyer gets frustrated and walks away as we wait for lenders to make a decision; a seller just stops trying to sell as they tire of the wait and process; a home goes in to foreclosure for both of the above, or worse – a sale falls through over just a few hundred or low thousands of dollars.
We – as in everyone – see the results in our neighborhoods. Especially in Florida, mother nature does not take kind to a home without people. Just two streets down from my Mandarin home there is a home that has been foreclosed on. If it were sold at short sale – a new homeowner would have kept an eye on the trees in the yard. They would have taken care of the weak and diseased tree.
A home without owners naturally decreases in value over time, as deferred maintenance and neglect take its toll. Tropical Storm Beyrl showed that it doesn’t take long to take an even larger bite out of a home’s value. Not just the home in question, but the entire neighborhood.
It doesn’t take long. That tree is still there.
Another reason that everyone wants to make the short sale process work – fewer foreclosures means a stronger market for all.
My Agent Greg 
Short sales turn a neighborhood into a slum landlord neighborhood and the slum tenants/ landlord don’t care about anything except the almighty dollar. Fastest way to destroy a neighborhood– Foreclosure, HUD auctions, short sales. Short sales at low prices also drive the neighborhood property values down with the Property Appraiser if considered qualified sales. Investors are out there just pouncing on 45k-60k short sales—and the slum moves in.