Photo: Vimeo/Uwe Lansing
CoreLogic, a real estate analytics firm, estimates that there were 1.6 million homes sitting in the housing shadow inventory as of January 2012. This represents a 6-month supply of homes.Also known as pending supply, shadow inventory represents the houses that are intended for sale but aren’t yet on the market.
“The shadow inventory remains persistent even though many other metrics of the housing market show signs of improvements,” says CoreLogic’s Mark Fleming.
Most experts are concerned that the presence of the shadow inventory is depressing home prices.
The good news is that this number hasn’t grown since October, the last time CoreLogic had data. The number is also down from the 1.8 million recorded in January of 2011.
Here are the key points from their report:
- As of January 2012, shadow inventory remained at 1.6 million units, or 6-months’ supply and represented half of the 3 million properties currently seriously delinquent, in foreclosure or REO.
- Of the 1.6 million properties currently in the shadow inventory, 800,000 units are seriously delinquent (3.1-months’ supply), 410,000 are in some stage of foreclosure (1.6-months’ supply) and 400,000 are already in REO (1.6-months’ supply).
- Florida, California and Illinois account for more than a third of the shadow inventory. The top six states, which would also include New York, Texas and New Jersey, account for half of the shadow inventory.
- The shadow inventory is approximately four times higher than its low point (380,000 properties) at the peak of the housing bubble in mid-2006.
- Despite 3 million distressed sales since January 2009, the period when home prices were declining at their fastest rate, the shadow inventory in January 2012 is at the same level as January 2009.
- The shadow inventory is approximately half of the size of all visible inventory listings. For every two homes available for sale, there is one home in the “shadows”.
- The segment of borrowers that were 60+ days delinquent in the past but were “cured” and are now current on their payments is increasing. This figure was 7.2 per cent in January 2012, up from 5.7percent a year ago.
- The total per cent of borrowers who were ever 60+ days delinquent (irrespective of delinquency status today) increased to 15.5 per cent in January 2012, up from 14.3 per cent a year ago.
- The highest concentration of shadow inventory is for loans with loan balances between $100,000 and $125,000. More importantly while the overall supply of homes in the shadow inventory is declining versus a year ago, the declines are being driven by higher balance loans. For loans with balances of $75,000 or less, however, the shadow is still growing and is up 3 per cent from a year ago.