Couple of problems with an easy answer. From what we can tell the GSE’s and banks are busy working out short sales rather than pursuing foreclosure in many cases. Second, while there are >10 million homeowners who have negative equity but who are current on their mortgages, prices have not risen enough to warrant them to try and sell their homes now. While units are up strongly in most markets prices have not recovered enough to bring these reluctant homeowners into the market. Normally nearly 4% or 400,000 of these homes would be available in markets across the country. Meanwhile investors are getting strong returns from rental, and again, prices have not risen enough to warrant selling now.
Over the next few months, barring a substantial change in these conditions, we will see a slowdown in housing sales, not because of a lack of qualified buyers, but simply because we are out of houses to sell. Incredible to think it has come to this.