Where is the Shadow Inventory?

September 21, 2010

shadow inventory floridaWASHINGTON – Sept. 20, 2010 – For the last year, the real estate industry has been talking about shadow inventory and the coming flood of distressed properties. Where are they?

Here’s what’s happening, according to a recent paper by Alan Mallach, a senior fellow the Brookings Institution:

• Some delinquencies have been resolved through loan modifications or people working out the problems on their own.

• Banks are getting better at managing short sales.

• Investors are aggressively buying up properties, sometimes in bulk, directly from the banks or at courthouse auctions so they don’t hit the market.

The likeliest outcome, Mallach predicts, is a steady flow of foreclosures over a long timeframe that will prevent another crash in home prices – but it will probably lead to low or no appreciation in home prices for a while.

Source: The Wall Street Journal, Nick Timiaros (09/16/2010)

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7 Responses to “Where is the Shadow Inventory?”

  1. James Foxx on September 28th, 2010 11:41 am

    I think this is a correct assessment. There won’t be any huge flood of foreclosures, but it will be a long and prolonged recovery from the impact of distressed properties. There are still plenty of bad mortgages out there, and it’s true, they’ve just been slowed down through homeowner assistance programs.

  2. Florida Speeding Ticket Lawyer on October 9th, 2010 2:04 am

    Foreclosure houses are very hard to manage. There are advantages and also disadvantages when buying a foreclosure houses. If you don’t know how this works, it is much better to consult a real estate lawyer to shed some light. Foreclosure houses are also difficult to market because of the recession, and the federal government released funds for home owners to aid them on their payments. Reclaiming a foreclosured house is very possible for homeowners.

  3. Minneapolis homes on October 24th, 2010 1:31 am

    Yeah, we have heard plenty of ballyhoo about the shadow inventory in the Minneapolis real estate market. The rate of lender mediated properties coming on the market has slowed, but unfortunately, foreclosure inventory has piled up because they are not coming off the market fast enough.

  4. Lincoln Mortgage on October 25th, 2010 12:48 pm

    It’s important to look at the silver lining here. Personally, I’m a recent graduate, and it being a buyers market, I can get a house in the next few years. by then, the timing will be perfect.

  5. Peachstate Financial Services on October 31st, 2010 1:47 pm

    I hope your assessment that bank held foreclosures will be released slowly and not create more havoc with values. I am not quite as optimistic, the banks will probably dump these things on the market the minute they think they will sell.

  6. giselle @ roofers charlotte on October 31st, 2010 7:43 pm

    Dealing with foreclosures are complicated. Homeowners have to consult an expert when they have questions about it. Although, we have survived the recession, I think we are improving as far as selling foreclosed houses are concerned.

  7. mae @ conference table on December 12th, 2010 8:55 am

    If you are looking for a good buy, then look for foreclosure home listings. Banks often times, will sell the home for less than appraisal price, just because they want to get rid of it.

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