However, buyers lucky enough to get their hands on a short sale can secure high-quality homes at just a fraction of fair value.

FORBES: Finding Value in the Economic Downturn

Potential homeowners are reluctant to bid on homes in foreclosure or negotiate a short-sale in light of the continued uncertainty of the legal regime.

FORBES: It's Time To Finalize The Robo-Signing Settlement

In short, fewer fire sale foreclosed properties on the market will narrow the price differential between those and new homes, which will increase the relative attractiveness of new homes, thus stimulating construction activity.

FORBES: Coming To America