Often in some NJ urban areas, the short sales and pre-foreclosures are becoming the market.  They may or may not sell significantly below the "market" rate.  That depends on the typical factors that sell houses: location, condition, amenities; external, functional and physical obselescence, etc...  One of these houses in good condition and location, etc... can still sell for fairly close to a conventional for sale property, despite a distressed sale or seller.