As noted in recent postings, there has been a significant drop in home inventory. This has been particularly notable in homes that are ready to move in. The drop in inventory is discouraging to home buyer’s and is resulting in making it difficult for the Buyer to find a home.
Part of this decrease is reflected in changes in the shadow inventory as reported by CoreLogic. CoreLogic counts shadow inventory, also known as pending supply, by calculating the number of distressed properties that are seriously delinquent, in foreclosure, and held as real estate owned (REO) by servicers, but not currently listed on multiple listing services. “Since peaking at 2.1 million units in January 2010, the shadow inventory has fallen by 28 percent. The decline in the shadow inventory is a positive development because it removes some of the downward pressure on house prices,” said Mark Fleming, chief economist for CoreLogic. “This is one of the reasons why some markets that were formerly identified as deeply distressed, like Arizona, California and Nevada, are now experiencing price increases.”
With regards to states experiencing a decrease in the shadow inventory, CoreLogic notes: States with the highest decrease in serious delinquencies, which are the main driver of the shadow inventory, were Arizona (-37.0 percent), California (-28.0 percent), Nevada (-27.4 percent), Michigan (-23.7 percent) and Minnesota (-18.1 percent).