Existing Home Shadow Inventory Declines to 1.6 million units

CoreLogic: Existing Home Shadow Inventory Declines to 1.6 million units

by CalculatedRisk on 9/27/2011 

From CoreLogic: CoreLogic® Reports Shadow Inventory Continues to Decline

CoreLogic … reported today that the current residential shadow inventory as of July 2011 declined slightly to 1.6 million units, representing a supply of 5 months. This is down from 1.9 million units, a supply of 6 months, from a year ago, and follows a decline from April 2011 when shadow inventory stood at 1.7 million units. The moderate decline in shadow inventory is being driven by a pace of new delinquencies that is slower than the disposition pace of distressed assets.

CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of distressed properties not currently listed on multiple listing services (MLSs) that are seriously delinquent (90 days or more), in foreclosure and real estate owned (REO) by lenders.

Of the 1.6 million properties currently in the shadow inventory, 770,000 units are seriously delinquent (2.2-months’ supply) [down from 790,000 units in April], 430,000 are in some stage of foreclosure (1.2-months’ supply) [down from 440,000] and 390,000 are already in REO (1.1-months’ supply) [down from 440,000].

Mark Fleming, chief economist for CoreLogic, commented, “The steady improvement in the shadow inventory is a positive development for the housing market. However, continued price declines, high levels of negative equity and a sluggish labor market will keep the shadow supply elevated for an extended period of time.”

CoreLogic Shadow InventoryClick on graph for larger image in graph gallery.

This graph from CoreLogic shows the breakdown of “shadow inventory” by category. For this report, CoreLogic estimates the number of 90+ day delinquencies, foreclosures and REOs not currently listed for sale. Obviously if a house is listed for sale, it is already included in the “visible supply” and cannot be counted as shadow inventory.

So the key number in this report is that as of July, there were 1.6 million homes seriously delinquent, in the foreclosure process or REO that are not currently listed for sale.

Note: The unlisted REO seems a little high since total REO has dropped sharply over the last couple of quarters.


1 Comment

Filed under Home Sales

One response to “Existing Home Shadow Inventory Declines to 1.6 million units

  1. Heading in the right direction for a change! What makes me weary of the Shadow Inventory is how the numbers can change so drastically. CoreLogic seems like they have the best data on the Shadow Inventory and seems to be the most consistent figures.
    Have you seen any data for local/regional areas? I am trying to locate good estimates for my area.

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