The median price home in California continued to increase in September, driven by slim inventory levels. Inventory numbers have averaged just over 4 months for the past 3 months, suggesting that the California real estate market may be climbing back toward normalcy. A look behind the top-line numbers indicate that current conditions have resulted from a heavy dose of policy intervention and from efforts by lenders – who currently dominate the supply side of the market – to manage the flow of troubled mortgages and properties at all stages of the ‘foreclosure pipeline’ from delinquencies to REOs.