If you are in a short sale situation and you've been on the fence as to whether to sell your home or wait it out, you might want to consider that the Mortgage Debt Relief Act of 2007 is set to expire midnight December 31st, 2012.  

Short sales are a painful process to go through as a seller and also as a buyer.  If you are underwater on your mortgage its probably because you bought at the top of the market in 2005 or 2006, and you might have a first and a second mortgage, which enabled you to get 100% financing.  Now in order to sell your home you have to get the banks to agree to take a loss.  The Mortgage Debt Relief Act made it so the banks couldn't make you accountable for the taxes on the loss.  As of January 2013, you are on the hook for paying taxes on 100% of the loss.  For most home sellers, that is going to mean thousands of extra dollars of debt they are going to be liable for.

It takes months to get a short sale approved normally, so the time is now to decide if you want to list your home for sale as a short sale!  A closing in January 2013 doesn't help you here.

I haven't seen as many short sales in Parker CO as in the past, so that either means that the homes in that situation have sold or they are going to wait for the market to turn around.  Less short sale activity has been good for the market and made it healthier. If you choose to wait for the market to come back so you aren't underwater, then good luck...hope you have a decade or so just in case.