The banks are holding off for their own survival. RE values and the health of the banking system are inexorably linked. It’s the survival conspiracy. The trillion + that the Fed printed to buy MBSs is only a small drop in the bucket of total losses and every % RE falls makes it billions more.

Regardless of what we all have been led to believe, losses still matter to the banks.

In a way, they are waiting for a miracle.

At this point, the Obama administration has fully signed on to what the banks are doing. So his political health is directly linked to RE values as well. He missed his opportunity to purge the system early on. So, surely, he is cheering the withholding of shadow inventory as well.