Vast shadow inventory threatens Miami’s real estate recovery

While Miami sales activity has been improving, there’s a shadow lurking behind the residential real estate recovery, the Miami Herald reported. Specifically, more than 200,000 homes are either owned by lenders or headed for foreclosure in Miami compared to a current inventory of about 30,000 listed on the active market.

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“A lot of people don’t understand how much inventory is set to come on line in the next 18 to 24 months,” said Deerfield Beach-based McCabe Research & Consulting CEO Jack McCabe. “When you compare what the Realtors show as inventory to what’s out there, you realize we have a long way to go.”

Miami, along with Las Vegas, Cleveland and Sacramento, was the hardest-hit market in the nation by the recession, although the numbers are grim from coast to coast. Nationwide there are 3.5 million homes listed for sale, representing a nine months supply as about 5 million homes are on pace to be sold this year. A healthy market has an inventory of about six months, or 2.4 million homes in this sales climate. But 4 million more homes are part of a vast shadow inventory that pushes the total supply to three times that figure. [Miami Herald]

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