hpi, you’ve not been looking at the MLS if you say that “most of resale homes are for big profit at little holding cost, they can be sitting on the MLS for years, but they don’t care, which can’t be treated as true inventory as new home sale or foreclosure sales.”

I see plenty of houses where the holding costs are adding up month after month. An empty house is a house that’s bleeding money. They can’t sell because they can’t bring themselves to take the loss or they can’t afford to bring money to escrow.

A stagnant market will eventually cause a declining market because homeowners can’t get out. The transaction costs will wipe out any equity they have.