I do agree that the short sales are priced low to elicit offers that the FBs can submit to the lenders to try to pressure them.
However, by listing low the short sale FBs submarine the whole neighborhood and cause the legitimate sales to rot away.
Technically, asking prices are not comps (only sold transactions are). But ocrenter is right in that the direction of the market is down to at least the short sale asking prices.
During the boom, it was not unknown for Realtors to collude to manipulate asking prices and drive the prices up. In essence they used the asking prices as comps. And now, the Reators won’t accept asking as comps? I see a certain self-serving dichotomy here.