Existing Home inventories have shrunk back down to 2004 levels from their peak in 2007. While the shadow inventory held by banks is still a concern, there are now nearly 10 bidders (mostly cash) for each foreclosure or short sale. Therefore, those under-priced foreclosures are being picked up very quickly by investors. You could anticipate the market to clear as quickly as the foreclosures come to market (over the next 12 to 18 months). With inventories shrinking, builders building only at an annual pace of 400,000 new homes instead of the long term average of 1,000,000 homes, with 1 to 1.2 household formations annually in the US, and with the “mortgage payment to rent payment ratio” at nearly 1, it could be time to start questioning if prices will increase at the end of next year?