Are the best values in Short Sales and Foreclosures/REOs?

A lot of people think that the "deals" to be made are in foreclosures and short sales. What they don't realized is that many of these sales go for asking or over, and may not represent the best values. Considering that most REOs or short sales have substantial damage done to the homes, the amount of money you save off of it being bank-owned or bank-involved is often negated by the impending work that needs to be done to them to bring them up to move-in standards. 237 sales in the last 3 months in San Luis Obispo County were either short sales or REOs. REOs are selling for 99.8% of their list price, on average. In some cases, they are selling for as much as 125% of their list price. Short sales (90 of them in the last 3 months) are selling for 96.4% of their list price. In one case, a home went for 205% of asking price. On the other hand, 322 sales in SLO county over the last 3 months were NOT short sales or REOs. Of the properties listed for 540K or less, they sold for 96% of list price. Of those sales about $540K, they sold for an average of 92.4% of the list price. So, actually, the homes in the "higher" price ranges that are not foreclosures or short sales are selling for quite a bit less than those that are foreclosures/short sales in lower price ranges. So where do YOU think the best values are?!