'Shadow inventory' dips, but still high
The so-called shadow inventory -- homes that aren't on the market now but soon could be thanks to the foreclosure crisis -- receded in April, according to real estate data firm CoreLogic.
The company estimates the total at 1.7 million homes nationwide, down from 1.9 million in April 2010. (Both numbers add up to a five-month supply of homes because the pace of sales was faster last spring, with the federal tax credit in effect, than it is now.) CoreLogic attributes the drop to a combination of fewer homeowners newly behind on payments and a "high level" of distress sales.
A few interesting tidbits:
o Homes whose owners are seriously delinquent on their payments but not in foreclosure account for almost half the shadow inventory. The rest -- in equal split -- are homes in the foreclosure process and properties repossessed by banks but not yet on the market.
o The shadow inventory plus all homes for sale -- the "visible" inventory -- added up to 5.7 million units in April. To put it another way: Three in every ten of those properties are in the shadow group.
o CoreLogic says shadow inventory has dropped 18 percent since peaking in January 2010. But its chief economist, Mark Fleming, expects several more years before total absorption "given the long timelines in processing and completing foreclosures."
Here's the question of the day, folks: Does the much-discussed shadow inventory make any difference to you? If you're thinking of buying, is this potential pipeline holding you back for now? Sellers, has it factored into your strategy at all?