Phoenix home prices are on the rise, but short sales in the booming market remained flat in June.

High demand and shrinking supply pushed prices up 23% in June from last year, according to Fletcher Wilcox, a real estate analyst at Grand Canyon Title Agency. Digging through local multiple listing service data, Wilcox found traditional home sale prices rose 11% from one year ago, and even lender-owned sales — or repossessed homes — sold for 36% more than they did last year.

Short sale prices were almost unchanged, however.

"The reason for flat short sale prices is because lenders are approving many short sales below market value to get through the real estate mess as fast as possible," Wilcox said. "So lenders are short selling more and foreclosing less."

Nearly 1,900 short sales closed in June, the highest monthly total ever for the area, according to the MLS data. More than 56% of the transactions were made with cash.

Wilcox said some banks are paying out huge incentives to borrowers in order to move the properties.

"Also, I have been told Chase has paid some short sale sellers between $10,000 and $30,000 on the short sale," Wilcox said. Indeed, the bank completes more short sales than any other and reports surfaced it was paying out incentives to entice troubled borrowers.

Short sales more than doubled the 726 REO sales in Phoenix during June.

"Lenders are taking advantage of the investor demand in Greater Phoenix for single family properties by short selling to them, and investors are flocking to short sales because of purchase price," Wilcox said.

Phoenix is one of the fastest growing markets in the country. Zillow (Z) reported a 12% growth in Phoenix home values over the past year was the most of any metro area. Fewer homes are listed for sale, forcing investors to flock toward any new properties coming to market from the banks.

According to the data, the area held a 1.2-month supply. A normal market has a six-month supply of homes for sale.

Still, most of the sales activity resides in the lowest end of the market. Roughly 62% of sales were under $200,000, according to Wilcox.