Don't be overly concerned if there are many short sales being marketed in a neighborhood where you are shopping for a home. I believe, if it is in a good area with good growth potential as in the areas surrounding the new Medical City in Southeast Orange County, it can be a great opportunity for a bargain buy and a wonderful investment. In this case the fact that a neighborhood has many short sales is more a function of the fact that it was initially sold during the peak of the real estate cycle in 2005 or 2006 than anything else. Since the whole neighborhood was sold at that time the initial investment was high and when prices dropped to today's levels many owners found they owed more than their properties were worth. Thus the short sale or foreclosure. Remember real estate vales are cyclical but I believe that overall in the long term they will continue to grow.