The California Public Employees› Retirement System, the largest U.S. public pension fund, may sell part of its $2 billion in residential land holdings after the investments lost 31 percent last year amid falling home prices and forecasts of further declines. Vacant land intended for housing is losing value as new home sales drop to the lowest in 17 years. The 10 largest homebuilders reduced their land holdings by 39 percent at the end of 2007. Demand for new homes may not revive for two or three years amid a supply glut, according to a report last month by RREEF Research, a unit of Deutsche Bank AG. Worldwide