There is still a gap between distressed home sales and existing home sales, the blog Calculated Risk reported , despite the significant downward revisions to existing home sales for the years 2007 through 2011.
Following the housing bubble and bust, the gap appeared mostly because of distressed sales. The flood of distressed sales has kept existing home sales elevated, and has depressed new home sales, since builders can't compete with the low prices of all the foreclosed properties.
Calculated Risk expects this gap to eventually close once the number of distressed sales starts to decline.
To see the graph, click here .