As a couple people have already noted, a good number of the foreclosed properties have not been released back onto the market for resale yet. The MLS is not the only venue for marketing a property. There are other ways to sell a property, and during a downturn these other ways get used a little more often. I don’t know how many of those properties there are, but I have a feeling it’s more than a few.
I interpret the decline in listings to mean that some of these less motivated sellers have given up for now. Remember, there are still some bulls who are saying the market is close to bottoming out and we’ll be back into a moderate growth mode soon. Perhaps some of these sellers are dumb enough to take such talk seriously.
If you thought your property would become a hot commodity in 18 months it might make you decide to ride it out rather than to take the loss now. If you thought the politicialns were being serious about government handouts or forcing lenders to hold off on foreclosure you might try to extend your struggle to hang on to the house in hopes of avoiding the bullet. If you were never that serious about selling you might decide to take the longer view and ride it out regardless of how long it took.
