RealtyTrac only considered markets with at least 200 short sale or REO transactions in the fourth quarter of 2012.
For the list of short sales, RealtyTrac took into account four factors: fourth quarter annual percent change in short sales, average sales price, average amount short (difference between the sales price and the loan amount owed to the bank), and the time it took to sell from the foreclosure start date.
Out of the 15 markets selected, nine were located in California. Three California metros led with the biggest year-over-year surge in short sales. Santa Barbara experienced a 107 percent annual increase in the fourth quarter and was followed by Visalia (106 percent) and Fresno (97 percent). Other California metros on the list were Vallejo, Bakersfield, Sacramento, Stockton, Modesto, and Riverside. The time to sell for the metros averaged 235 days.
Two Michigan metros, Grand Rapids and Detroit, had the lowest average sales prices, $91,145 and $97,233, respectively. On the other hand, in Santa Barbara, short sales sold for an average price of $283,825.
Phoenix stood out among the pack for averaging the shortest time to close, 188 days.
Other metros that made the list were Las Vegas, Virginia Beach, and Des Moines.
RealtyTrac also noted the average remaining deficiency after a short sale exceeded $100,000 in seven of the 15 markets, which suggests banks are willing to take a huge loss with a short sale to avoid foreclosure.
""Short sales are on the rise as a better alternative to foreclosure in many areas Ã¢â‚¬" good news for buyers and investors in markets where short sales are closing more quickly at solid discounts,"" said Daren Blomquist, VP at RealtyTrac.
""But buying from the bank may still be a better option in other markets because of increasing REO inventory, deeper discounts and shorter times to close,"" he added.
For the list of the top REO markets, RealtyTrac took into account annual percent change in REO sales, average sales price, average days to sell, and percent discount compared to non-distressed sales.
Overall, the markets on the list averaged discounts ranging from 33 to 57 percent and the time to sell ranged from 139 to 175 days, compared to 188 to 358 days for short sales.
Out of the 15 metros on the list, two Ohio markets stood out. Cleveland and Dayton both averaged lower prices, the shortest days to sell, the most significant increases in sales, and the greatest discounts.
In Cleveland, REO sales increased 141 percent, the average REO sales price was $57,782, and discounts averaged 56 percent. Dayton has seen REO sales increase 123 percent over a one-year period, its average sales price was $50,579, and discounts stood at 57 percent. Both metros averaged 139 days before going to sale.
Meanwhile, Sarasota, Florida has seen REO sales increase just 19 percent and the average REO sales price was $127,181, the highest out of the other metros.
Other metros on the list included Columbus and Canton, Ohio; Chicago and Rockford, Illinois; Chattanooga and Memphis, Illinois; Daytona, Palm Bay, and Pensacola Florida; and Charlotte, Greensboro, and Winston, North Carolina.