Virginia REALTOR® Frank Borges LLosa did some digging into the Northern Virginia short sale market and made a startling discovery: Only five percent of short sales actually close. Frank’s post was picked up by Business Week’s Hot Property blog.

Another VAR member, Jeff Royce, remarked to me that he is seeing average home prices come back to earth in many Northern Virginia localities because of short sales and foreclosure sales, but with so few short sales actually going to closing, he questions whether or not the bank really has any intention of selling.

Is this isolated to Northern Virginia, or is it more widespread? What are you seeing?