Shadow inventory lurks within lender balance sheets

For every two homes available for sale, there is another in lender shadow inventoryProperties available on the market through the multiple listing service (MLS).The inventoryProperties available on the market through the multiple listing service (MLS). of properties whose pending release onto the market (e.g., REOs, foreclosures) impacts the stabilization of real estate prices and volume., according to a report by CoreLogic. Nationally in October 2011, 1.6 million residential units were shadow inventoryProperties available on the market through the multiple listing service (MLS).The inventoryProperties available on the market through the multiple listing service (MLS). of properties whose pending release onto the market (e.g., REOs, foreclosures) impacts the stabilization of real estate prices and volume. comprising property delinquent 90 days or more, in foreclosure or real estate owned (REO) and thus were not yet listed with a multiple listing service (MLS).

This volume of homes kept off the market, tucked quietly away in lender portfolios is currently four times higher than in 2006 — the last year of the Millennium BoomThe years 2000-2007 leading up to the current economic recession, characterized by loose lending practices and unsustainably high property prices and sales volume.The years 2000-2007 leading up to the current economic recession, characterized by loose lending practices and unsustainably high property prices and sales volume. — when a mere 380,000 properties constituted nationwide shadow inventoryProperties available on the market through the multiple listing service (MLS).The inventoryProperties available on the market through the multiple listing service (MLS). of properties whose pending release onto the market (e.g., REOs, foreclosures) impacts the stabilization of real estate prices and volume.. California, Florida and Illinois account for one third of the current volume.

Although there have been three million sales of distressed property from January 2009 to October 2011, the current volume of shadow inventoryProperties available on the market through the multiple listing service (MLS).The inventoryProperties available on the market through the multiple listing service (MLS). of properties whose pending release onto the market (e.g., REOs, foreclosures) impacts the stabilization of real estate prices and volume. remains unchanged since 2009.

first tuesday take: Here’s what lenders aren’t telling us about why the shadow inventoryProperties available on the market through the multiple listing service (MLS).The inventoryProperties available on the market through the multiple listing service (MLS). of properties whose pending release onto the market (e.g., REOs, foreclosures) impacts the stabilization of real estate prices and volume. remains off the market: when they eventually agree to a short payoff on a property with a seriously delinquent mortgage, or sell an REO, that is the moment they must report the loss and damage their balance sheets.