I found this article about large investors interesting. Large investors are absorbing all of the foreclosures and short-sales in parts of the country where home values have been decimated. As many areas are now getting much closer to the previous higher levels, these large investors will gradually release (sell) their inventories once they've realized as much profit as they can. But even with a modest appreciation of say 4% per year, this amount is huge because they're leveraged. They won't be likely to "dump" their inventory all at once so I'm hopeful that we'll have a steady real estate market.