Shadow Inventory Falls

The nation’s shadow inventory has shrunk about 10% from levels seen a year earlier, according to new data from CoreLogic.

Shadow inventory totaled 1.6 million units in January 2012, a six-month supply, down from January 2011 when it stood at 1.8 million units, an eight month supply.

Distressed sales (short sales and real estate owned) offset the roughly equal amount of new seriously delinquent (90 days or more) loans in the shadow inventory.

Phoenix Homes for sale

Shadow Inventory Falls


More than 50% of the shadow inventory resides in six states, Florida, California, Illinois, New York, Texas and New Jersey. All of these states have been severely impacted by sharp price declines or long foreclosure time-lines.

Of the 1.6 million properties in the shadow inventory, 800,000 units are seriously delinquent, 410,000 are in some stage of foreclosure and 400,000 are already in REO.

Florida, California and Illinois account for more than a third of the nation’s shadow inventory.

The current shadow inventory level is about four times higher than its low point of 380,000 properties at the peak of the housing bubble in mid-2006.

So what does this information mean to the person buying or selling a home? Well, for one thing foreclosures are trending down and are having less of an impact on many markets around the country. While there are some market forces that could change those numbers the overall outlook for a balanced market, sooner rather than later, is still very good.

The main thing to remember is that all real estate markets are local. Local meaning specific neighborhoods, subdivisions or zip codes. 

If you are interested in buying or selling a home contact your local Realtor and let them help you understand the local market. That’s their job and they’re happy to do it.

If you’re interested in the Phoenix Metro market give me call, 602-793-1627, or E-mail I offer a free no obligation consultation.