Housing Bears are making their last stand on the shadow inventory of 1.6 million homes that could flood the market at any time.
But judging from what’s happening in Florida, this threat may be overrated. Citi’s Shawn Snyder comments on the recovery:
Regional markets are on the mend with the share of markets in recovery having risen sharply over the past six months. The NAHB / First American Improving Markets Index (IMI) now shows nearly 30% of the 360 largest metropolitan statistical areas in recovery (up from just 3.3% at September 2011 inception). Most surprisingly, Florida now has nine cities included in the IMI – including Orlando and Tampa – which have some of the highest foreclosure inventory rates in the country.
Florida has been outpacing the rest of the nation in job growth. Evidence suggests the labour market recovery may be a more powerful driver of home prices than foreclosures and that a clearing of the foreclosure stock may not be a prerequisite for regional recovery.
More on the national shadow inventory:
We have long thought that the unwind of the excess foreclosure inventory is not a prerequisite for a turning point in housing nationwide and are now seeing some evidence that it may not even be a prerequisite for local recovery.