There are two reasons you aren't finding foreclosures the first being that the banks do not want to release them until the interest rate goes up. At the lower prices they will make their money over the long term with the higher interest rates. The second reason is that if they released all of the homes in foreclosure, plus those in pre-foreclosure throughout the US (those homes that are over 180 days in arrears) adding 13 million homes to a market that is already showing a 9 month surplus would collapse the real estate market and we would be back to the 1990's when the savings and loans collapsed because of Reagan's deregulation of the banking industry.
The government is also artificially inflating the prices by bailing out the banks and the real estate brokers are telling property owners that this is temporary and short term. As with anything else, if you wait long enough the market will eventually collapse dispite all the propaganda about economic recovery.