Current residential shadow inventory fell to 1.5 million homes as of April 2012, according to a new report by CoreLogic.
In fact shadow inventory – distressed properties that are seriously delinquent (90 days or more), in foreclosure or are bank owned but not currently listed on multiple listing services (MLSs) – is 28 per cent off its January 2012 peak of 2.1 million homes.
“The decline in the shadow inventory is a positive development because it removes some of the downward pressure on house prices,” said Mark Fleming, chief economist for CoreLogic. “This is one of the reasons why some markets that were formerly identified as deeply distressed, like Arizona, California and Nevada, are now experiencing price increases.”
Seriously delinquent homes account for 720,000 of the 1.5 million properties in shadow inventory. 410,000 are in some stage of foreclosure and 390,000 are already in REO. And the dollar volume of shadow inventory fell to a three-year low of $246 billion in April 2012, from $270 billion a year ago.
But a report from RealtyTrac suggests that the spike in foreclosure starts could translate into more inventory of both short sales and bank-owned properties (though these would be listed for sale) which could again pressure home prices.
Here’s a chart from CoreLogic that shows shadow inventory starting January 2006:
Don’t Miss: The State Of The Housing Market >
Business Insider Emails & Alerts
Site highlights each day to your inbox.