The ‘shadow inventory’ (homes either owned, or expected in the short term to be owned, by banks but not yet listed for sale) of our current housing market is showing signs of decreasing shrinking from 2,000,000 units nationally in January 2010 to 1,800,000 units as measured by CoreLogic in January 2011. This 10% reduction is positive sign of improving economics and an increasingly solid base for recovery for the housing market.
This glut of distressed homes has largely contributed to the slow recovery of the housing market as their poorer condition and lower prices have kept home prices from appreciating as the underlying economy has improved.
It’s important to remember that there still is a significant inventory of distressed property both for sale and within the shadows – and this inventory will take time to clear probably a year or so. However as this inventory clears we’ll start to see the recovery accellerate with more buyers jumping off the fence and into the market.
Want more detail? Here’s a link to the story.