Short Sales accounted for 40 percent of all San Joaquin County home sales in February, an indicattion that the once bemoaned practive hasbecome a predominate method of sale for troubled homeowners.

Countywide in February, 515 homes moved into escrow via short sales- when a person sells his home for less than he owes on his mortgage- a 31 percent jump over January short sales and a mighty 278 percent leap over the number of short sales made in February 2009, according to this month's Trendgraphix sales report, based on Multiple Listing Services data.

With thousands of San Joaquin County homeowners underwater on their mortgages- owing more than the home is now worth- governement and banks have become more accepting of short-sale transactions.  With banks loosening up on short-sale approvals, transactions are much easier for real estate agents and brokers.

"Short sales are really big right now.  We are seeing short sales approved in a shorter time," Grupe Real Estate broker Stephanie Rodriguez said.  "I've had some approved in tow or three months.  If you can get a short sale approved in 60 days, that is very fast."

Rodriguez said a yearlong wait is not uncommon for short sales, but the governement continues to provide support for them to help troubled homeowners who were caught in the middle of the nation's foreclosure crisis.

The state Legislature is considering a bill that would provide financial relief to homeowners after a short sale is made by clearing them of tax obligations on the difference between their mortgages value and the short sale price.

Currently, a homeowner who uses a short sale would have to include that difference as income.  For example, if a home with $300,000 remaining on the loan is sold for $250,000, the seller would be taxed on the $50,000 difference.

"It's nice to see short sales being encouraged, because it's always a case where people just feel defeated to think they are going to spend years making payments on thei house that isn't worth it,"  Rodriguez said.  "It was a bad invesment, and they just want to get out from under it."

The overall median sales price for San Joaquin County homes declined more than 5 percent, from $169,000 in January to $160,000 in February, Trendgraphix said.

Real estate agents say they are still seeing multiple offers on entry-level homes priced at $150,000 or lower.  It's much sloer for the move-up market at the $300,000 level, they say.

Sales could increase if banks begin to release foreclosed properties on the market.  The Wall Street Journal reported that banks were holding on to 645,800 foreclosed homes in January, a 4.6 percent increase from a month earlier.  The industry calls this "shadow inventory."

"We are all still waiting on the banks to release their shadow inventory.  The homes are there; they are just till releasing them in fits and spurts,"  Stockton PMZ Real Estate manager Ben Balsbauh said.

Reid, Keith. "Short Sales Huge in San Joaquin County." The Record [Stockton] 20 Mar. 2010. San Joaquin Media Group, 20 Mar. 2010. Web. 25 Mar. 2010.