Part of the reason why U.S. banks are keeping these homes off the market is so that they don’t have to write-down these properties to their real value (which must be done the moment the house is sold). By keeping them off the market, they can maintain their fantasy-valuations on these properties which sit on their “stress-tested” balance sheets.

However, the second, equally-obvious reason why U.S. banks are holding these properties off the market is to try to simulate a “bottom” in this market. It is elementary economics that when you increase the supply of something, you reduce the price; and when you decrease the supply of something you increase the price.