Nationwide shadow inventory fell slightly in April from a year ago to 1.7 million units, or about five months-worth of supply, according to a report released today by analytic firm CoreLogic. But there are still about four times as many units in shadow inventory as there were before the downturn. Shadow inventory accounts for homes that are seriously delinquent, in foreclosure or owned by lenders, but are not currently listed. Shadow inventory reached its peak in January 2010 with 2 million units, or 8.5 months supply, according to CoreLogic. In April 2010, the shadow inventory of residential units sat at 1.9 million units.
“The shadow inventory has declined by nearly one-fifth since it peaked in early 2010, in large part due to a reduced flow of newly delinquent loans in recent months,” said Mark Fleming, chief economist for CoreLogic. “However, it will probably take several years for the shadow inventory to be absorbed given the long timelines in processing and completing foreclosures.” According to the report there are an additional 2 million negative equity loans that are severly underwater and risk entering the shadow inventory. Total shadow and visible inventory stood at 5.7 million units in April 2011. — Adam Fusfeld