Steve Thomas at Altera Real Estate reports the number of short sales actively listed in Orange County as of Thursday increased by 138 from two weeks earlier for a total of 2,318. In a short sale, a homeowner sells for less than outstanding mortgage debt on a property. “As I forecasted last month, short sales are going to by king in 2010,” Thomas wrote in his twice monthly report on housing demand. Some market watchers foresee banks allowing more short sales as they deal with a backlog of delinquent loans. But others think too many struggling homeowners have second mortgages with different lenders, complicating the process. In any case, the number of foreclosures for sale dropped by 20 listings to 355. This does not include foreclosures offered at auctions known as trustee’s sales. Here’s a look at various slices of the O.C. market as of last Thursday: total inventory listings; distressed property listings; and the share distressed listings have of total inventory supply on a percentage basis in each niche … Slice All inventory Distressed Share By price … • O.C. $0-$250k 1,212 683 56% • O.C.

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