March 23rd, 2012
Econintersect: CoreLogic reported that real estate shadow inventory was little changed between October 2011 and January 2012 at 1.6 million residences. CoreLogic defines the shadow inventory as homes not listed for sale but:
- have serious deliquent mortgages,
- are in the foreclosure process, or
- are owned by Lenders.
The National Association of Realtors reported (analysis here) current homes for sale (but not sold) at 2.43 million - meaning the total home inventory including the shadow inventory at approximately 4 million homes. Using the current rate of home sales, the total home plus shadow inventory represents over 10.5 months supply.
“Almost half of the shadow inventory is not yet in the foreclosure process,” said Mark Fleming, chief economist for CoreLogic. “Shadow inventory also remains concentrated in states impacted by sharp price declines and states with long foreclosure timelines.”
“The shadow inventory remains persistent even though many other metrics of the housing market show signs of improvements. In some hard-hit markets the demand for REO and distressed property is now outstripping supply. As we move into what is traditionally the peak selling season for real estate, servicers will certainly be watching closely to see if now is the time to move more inventory out of the shadows,” said Anand Nallathambi, president and CEO for CoreLogic.