Explaining Southern California's economy

Short sale boom: Maybe in California, but not in the rest of the U.S.

A short sale home in the Spring Valley a


A short sale home in Las Vegas. An expected short sale boom in the U.S. hasn't materialized, according to the National Association of Realtors. But in California, short sales have been on the rise.

If you’re underwater on your mortgage, you might want to consider a short sale, asking the bank to take less that what you owe. Some real estate experts thought a boom in short sales might appear at the end of 2012. But the National Association of Realtors says that hasn’t happened.

Why? It all comes down to the fiscal cliff. In addition to tax cuts and stimulus spending, something that might also go away is the Mortgage Forgiveness Debt Relief Act.

It expires at year’s end and if Congress doesn't extend it, short sellers could face an IRS tax bill for the forgiven portion of their mortgage. But on Thursday, the president of the National Association of Realtors, Gary Thomas, pointed out that there’s been no short sale boom. Short-sellers haven't been rushing to beat a possible fall off the cliff.