Wondering whether 2011 is the right year to buy that new home?

Well consider this; S&P warned this week that it will take 44 months to clear all the distressed homes out there, many of which aren’t actually on the market.

That’s nearly four years, up from the second quarter estimate of 40 months.

This so-called shadow inventory consists of homes that will eventually end up on the market, thanks to default and subsequent foreclosure.

However, many of these properties are being held by mortgage lenders until home prices improve.

Traditional housing inventory numbers don’t factor these in, painting a rosier picture than reality suggests.

As of the end of the third quarter, the principal balance of foreclosed homes was more than $450 billion, representing roughly a third of the non-agency residential mortgage-backed securities market, those not guaranteed by Fannie Mae and Freddie Mac.