Over the weekend, Jeff Collins at the O.C. Register noted that the “Central Park West” complex in Irvine, California that was mothballed by Lennar in 2007 is now back on the market.
And from Amanda Fung at Crain’s New York: ‘Shadow’ condos dim sale outlook (ht Nick)
A little over two years ago, SDS Procida suspended plans to market The Dillon, its 83-unit Hell’s Kitchen condo, when residential real estate tanked … the developer finally put the units on the block three weeks ago.
“It is still early—you’re not seeing a flood of apartments yet—but we may see it happen during the second half of the year,” says Jonathan Miller, chief executive of appraisal firm Miller Samuel Inc.
Mr. Miller estimates that there were 6,500 units of shadow space in Manhattan alone during the first quarter of this year. If those apartments were unloaded all at once, supply would potentially skyrocket by 70%.
The term “shadow inventory” is used in many different ways. My definition is: housing units that are not currently listed on the market, but will probably be listed soon. This includes:
- Unlisted new high rise condos as discussed above. Note: these properties are not included in the new home inventory report.
- Homeowners waiting for a better market. Some of the increase in inventory in April might have been sellers hoping to take advantage of the tax credit. This includes the accidental landlords who will try to sell as soon as the market improves and the current tenant’s lease expires.
- REOs, foreclosures in process and some percentage of seriously delinquent loans (some will cure, some are already listed as short sales). See: Mortgage Delinquencies by Period
- It is difficult to put a number on the total, but it is in the millions of units and all this inventory will keep downward pressure on house prices for some time.