'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?
Categories: Distress sales, Question of the day, The foreclosure mess
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Comments
oh, so "only" 1.7 million homes getting ready to hit the market involuntarily? no problem there, none at all.
Posted by: chappy10 | June 24, 2011 10:30 AM
Elweedz is both a buyer and a seller. We are looking to trade up to a bigger home and, much to the puzzlement of my neighbors, is cheering every decline.
It makes no sense for anyone in my same situation to buy right now.
If housing falls another 20% (and it will) then my 250k home is now 200k. If the home Elweedz wants to buy is 500k and falls 20% then it loses 100k. Ill trade my 50k loss for their 100k loss every day. i could even argue that those the higher price ranges will suffer a higher percentage loss than the "working man" price range.
I know one thing, gravity works. No matter how stubborn sellers insist on being with the exorbitant asking price, the only one losing is them as they drain their bank accounts holding out for what they think their precious little piece of dirt is worth.
//ill keep my 5k, you keep your granite countertops.
Posted by: elweedz | June 24, 2011 11:04 AM
Watching the news a few nights ago,someone said the president wanted a new stimulis package.I wonder if that would include another tax credit for home buyers?
Posted by: brent | June 24, 2011 11:07 AM
In Florida, foreclosures filings decreased for a while as the mortgage servicers searched for new ways of robo-signing the documents to prove who owns the mortgages. The shadow inventory and likely defaults (substantial negative equity) remain as a huge overhand on the real estate market. The liquidation cycle will need to continue before home prices will stop decreasing.
Posted by: Don | June 26, 2011 11:11 AM