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Housing Market Casting a Smaller Shadow

The inventory of future short sales and foreclosures which will be coming to the market is known as ‘shadow inventory’. Future real estate pricing will be determined by the number of these distressed properties which eventually reach the market.

These properties sell at major discounts:

  • short sales at a 10% discount
  • foreclosures at a 35% discount

CoreLogic just reported this inventory is declining as more Americans are staying current on their mortgage obligations. Here is a graph from their latest report:

Bottom Line

There still are a substantial number of distressed properties that must be cleared. They will cause prices to soften in many markets. However, it is comforting that this number is finally beginning to decline.


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8 replies
  1. Tami Vroma
    Tami Vroma says:

    As a Grand Rapids Short Sale agent, i really appreciate your take on this market. Seems everyone is holding their breath. West Michigan Homes Sales are definitely up here! Would sure like to see us keep getting rid of some of that inventory!

    Reply

Trackbacks & Pingbacks

  1. […] term. However, the numbers of distressed properties currently in the foreclosure process is still very swollen. These properties will begin coming to the market in the second half of the year as short sales and […]

  2. […] term. However, the numbers of distressed properties currently in the foreclosure process is still very swollen. These properties will begin coming to the market in the second half of the year as short sales and […]

  3. […] term. However, the numbers of distressed properties currently in the foreclosure process is still very swollen. These properties will begin coming to the market in the second half of the year as short sales and […]

  4. […] term. However, the numbers of distressed properties currently in the foreclosure process is still very swollen. These properties will begin coming to the market in the second half of the year as short sales and […]

  5. […] term. However, the numbers of distressed properties currently in the foreclosure process is still very swollen. These properties will begin coming to the market in the second half of the year as short sales and […]

  6. […] term. However, the numbers of distressed properties currently in the foreclosure process is still very swollen. These properties will begin coming to the market in the second half of the year as short sales and […]

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