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The Real Deal Miami

Threat of shadow inventory may be “over-hyped”

December 26, 2012 02:15PM

Skeptics of the what many experts see as the eminent recovery of the U.S. housing market often point to the large shadow inventory of foreclosed homes yet to hit the market, but concerns over an inventory glut may be over hyped, according to the Wall Street Journal. For one, data shows that shadow inventory is shrinking. This year shadow inventory fell to 3.4 million units from a peak of 4.7 million in 2009, according to John Burns Real Estate Consulting data cited by the Journal. Moreover, the inventory of new homes for sale across the nation is at a 50-year low, while listings of previously owned homes are at an 11-year low. And banks have also become more efficient at approving short sales, where underwater homes sell for less than debt owed. [more]