A new report from CoreLogic shows that the shadow inventory of homes fell 12.3 per cent in October from a year ago.
Also known as pending supply, shadow inventory represents the houses that are intended for sale but aren’t yet on the market.
There are 2.3 million units in the shadows, which represent a seven month supply.
“The size of the shadow inventory continues to shrink from peak levels in terms of numbers of units and the dollars they represent,” said Anand Nallathambi, president and CEO of CoreLogic. “We expect a gradual and progressive contraction in the shadow inventory in 2013 as investors continue to snap up foreclosed and REO properties and the broader recovery in housing market fundamentals takes hold.”
Here are some key points from the report.
- As of October 2012, shadow inventory fell to 2.3 million units, or seven months’ supply, and represented 85 per cent of the 2.7 million properties currently seriously delinquent, in foreclosure or in REO.
- Of the 2.3 million properties currently in the shadow inventory (Figures 1 and 2), 1.04 million units are seriously delinquent (3.3 months’ supply), 903,000 are in some stage of foreclosure (2.8 months’ supply) and 354,000 are already in REO (1.1 months’ supply).
- As of October 2012, the dollar volume of shadow inventory was $376 billion, down from $399 billion a year ago.
- Over the three months ending in October 2012, serious delinquencies, which are the main driver of the shadow inventory, declined the most in Arizona (13.3 per cent), California (9.7 per cent), Michigan (6.8 per cent), Colorado (6.8 per cent) and Wyoming (5.9 per cent).
- As of October 2012, Florida, California, Illinois, New York and New Jersey make up 45 per cent of the 2.7 million properties that are seriously delinquent, in foreclosure or in REO. In October 2011, these same states made up 51.3 per cent of all the distressed mortgages that were at least 90 days delinquent, in foreclosure or REO.
Here’s a chart showing how shadow inventory has changed since 2006: