Half million dollar house in Salinas, Californ...

Half million dollar house in Salinas, California under foreclosure. (Photo credit: Wikipedia)











Shadow inventory–distressed properties not yet listed for sale–has decreased about 10 percent compared to a year earlier, according to CoreLogic.  While the decrease has been viewed as a welcome sign to housing experts, shadow inventory still remains a threat to a housing recovery, even at a time when the housing market has shown other signs of improvement in recent weeks.

For every two homes available for sale in the country, one home awaits in the “shadows,” HousingWire reports about the data.  The flow of distressed sales (short sales and real estate owned) offset the roughly equal flow of new seriously delinquent (90 days or more) loans into the shadow inventory.

“Almost half of the shadow inventory is not yet in the foreclosure process,” said Mark Fleming, chief economist for CoreLogic. “Shadow inventory also remains concentrated in states impacted by sharp price declines and states with long foreclosure timelines.”

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 top six states, which also include New York, Texas and New Jersey, account for half of the shadow inventory.

The top six states that account for most of the nation’s shadow inventory:

  • Florida
  • California
  • Illinois
  • New York
  • Texas
  • New Jersey

CoreLogic estimates shadow inventory by calculating the number of distressed properties not currently listed on multiple listing services that are seriously delinquent, in foreclosure and real estate owned by lenders.

Source: “U.S. Shadow Inventory Levels Down From Year Ago,” HousingWire (March 21, 2012)



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