Percent increase in short sales: 77%
Most of the top cities on RealtyTrac's list are in California, which doesn't surprise Blomquist. He says banks there approved large numbers of short sales during the fourth quarter to avoid a statewide anti-foreclosure "Homeowner Bill of Rights" that took effect Jan. 1. Vallejo, some 30 miles from downtown San Francisco, already had so many foreclosures that Forbes recently ranked the city No. 6 on the magazine's annual list of America's Most Miserable Cities. Of course, that means the 421,000-population metro area has plenty of distressed homes. Short sales there sold for just $192,432 on average during the fourth quarter -- $177,748 less than the typical property's unpaid mortgage balance.