Conventional wisdom has had it that, as lenders start processing their foreclosures again, a flood of REOs and other distressed sales are going to hit the market. Result: Home prices will drop again as this “shadow inventory” comes into the light.

Hmm. That train might not be coming after all.

But the analysts at Clear Capital have noticed what they think might be an encouraging sign: “Home prices across the nation saw light levels of depreciation in February, consistent with the trend we have seen over the last several months.”

What’s unusual (in fact, “unusual and encouraging”) is that the price drop was typical despite the increase in REOs in the market.

“The nation’s housing market lost less than -2% of its value year-over-year, showing an increased stability,” says the report. (I assume it means “lost less than 2%” and the double negative is an error.)

Click here to read all about it direct from Clear Cap, or click here for the HousingWire story.