You’re right. More foreclosures = more bank sales and auctions of homes. New home sales are still waaay down and new home starts are almost non-existent (all-time lows) Part of the problem is that the cost to build a new home is higher than the cost of purchasing a similar existing home because foreclosures have been driving down prices. 4 foreclosed homes on my son’s street (he lives in CA near Sacramento) have been bought since the first of the year by one man who is looking for bargains to invest in. Is it part of the process of realigning the market? Yes. Is it a signal that the economy is turning around and everything is on the verge of being sweetness and light? I doubt it.