As for inventory of homes - never been higher - and the future for inventory has never looked higher too. This is the "Real Recession" completely masked by Bernanke's inflation of stock market assets. I think he's hoping that investors will take their profits from the Federally-funded ($300 BL and counting) Wall Street/Federal Reserve casino, and invest in the "Man on the Street Homeowners' Association" and become for-profit Landlords.
These statistics prove that the new home market - plus the existing sales market - are being held completely HOSTAGE by foreclosure pricing. It also is a sure sign that Bernanke will not be raising rates any time in 2011 or 2012 for that matter. Any downturn in the economy will trap more existing homeowners in this illiquid mess, and cause more job losses.
The only silver lining in this rain cloud is that in 2009 the percent of total CA sales that were foreclosures was 57% (!). So that's down 13% in a year. At this rate it will take 3 more years to get foreclosures down to a manageable 5% of all sales. These are staggering statistics.
It is hard to fully comprehend the enormity of the problem facing new-home builders and home sellers in this climate. Emotionally it seems endless, but statistically, it looks like another 3 year slog is ahead before inventory is cleared.
The Great Recession has become the equal to the Great Depression, except there's no breadlines and not as much visual evidence of the economic destruction that's happening to the American Family under the surface.