The figures you cite with regard to numbers of unsold homes are a tad misleading, because they are absolute numbers rather than percentages. Absolute numbers may readily show records because the absolute number of homes in existence
is at a record high.
Meanwhile, though, I don't deny for a minute that real hardship is in store, both for communities and for individuals. The harsh fact is that prices have to adjust. If they don't you really will
see large(r) numbers of unsold houses.
The financial shenanigans of the past few years have themselves greatly distorted the market; on that we definitely agree. But further (even responsive) distortions will cause us all to pay for inflated housing values either through deflated dollars, tax dollars, or (most likely) both. And unless you're prepared to pay that way indefinitely, and increasingly
, there will be a reckoning. I'm frankly worried that the degree of denial abroad in our society will result in a collapse of our financial system far beyond what you have described.
BTW, I do hope you're not trying to sell your house just now. Because if you are, I'll bow gracefully out of this particular discussion