As new delinquencies slow and distressed property sales increase, the nation’s shadow inventory is beginning to come down. A report released yesterday by CoreLogic shows that in April shadow inventory, or pending supply, fell 14.8 percent in the last year to 1.5 million units. That represents a four-months’ supply and the lowest supply level since October 2008.
“Since peaking at 2.1 million units in January 2010, the shadow inventory has fallen by 28 percent. The decline in the shadow inventory is a positive development because it removes some of the downward pressure on house prices,” said Mark Fleming, chief economist for CoreLogic.
“This is one of the reasons why some markets that were formerly identified as deeply distressed, like Arizona, California and Nevada, are now experiencing price increases.”
The 1.5 million units in shadow inventory were composed of 720,000 seriously delinquent units, 410,000 units in some stage of foreclosure and 390,000 that are already bank owned. In all, shadow inventory comprises more than half of the 2.8 million U.S. properties that are seriously delinquent, in foreclosure or real estate-owned.
Shadow inventory units are those that are expected to hit the sales market but do not yet appear on multiple listings services. — Adam Fusfeld