If somebody felt inclined they could take delinquency rates, default numbers and sales and come up with a rough idea of how shadow inventory is trending. From a casual glance at the steady increase in delinquency rates and fluctuation of sales and defaults you can see that unabsorbed properties are bottle necking. Basically, the shadow inventory is growing, if anything.

On top of that around 45% of mortgage holders are underwater. Close to 300,000. Huge default risk. Loan Mods have a >50% change of re-defaulting.

Around 25% of mortgage holders are in some form of distress. Around 150,000 or so.

Given the statistical default rate of distressed mortgages coupled with the default risk of mortgages underwater, there is immense downward pressure that is not stopping anything soon.

Therefor, the only argument for a stabilizing market is unprecedented manipulation and public money thrown at a deteriorating problem. Fed intervention can not stop, in fact they have to increase based on the trends, just to maintain.

It’s not really a “market” to analyze. It’s a theoretical experiment with lots of hidden information, that nobody quite knows what will happen.