Abstract
Citizens of the United States are still suffering from the long-term effects of the 2008 mortgage crisis. Today, homeowners who cannot meet their financial obligations are being encouraged through public policy and the private marketplace to choose a short sale over foreclosure. This thesis compares the price discount associated with foreclosures with that of short sales in Sacramento County, California from September to December of 2016. I compare the selling price discount of foreclosure to that of short sale to identify the magnitude of benefit in choosing short sale over foreclosure. My Ordinary Least Squares regression analysis shows that foreclosure status (short sale) commands a 19.3% (12.4%) decrease in home selling price at the 99% confidence level. The data comes from the Multiple Listing Service (MLS) database and the 2010 U.S. Census. The values derived from the regression indicate that short sales are a better financial option for distressed sellers than foreclosure.