CoreLogic® reported today that shadow inventory of residential property as of August 2010 reached 2.1 million units nationwide. This figure is up from 1.9 million units from one year earlier.
“Shadow inventory” are those properties that are in foreclosure or already owned by lenders but not yet listed on multiple listing services (MLSs). Because these properties are not listed, they are typically not taken into account when discussing metrics such as months supply of inventory.
For example, the “visible supply”(those properties that are listed on the MLS) of unsold inventory was 4.2 million units in August 2010. These 4.2 million units represent a 15 month supply of inventory. However, when adding the shadow inventory to the visible supply, we obtain a total of 6.3 million units, which equates to 23 months of inventory.
See the CoreLogic® report here: Shadow Inventory Jumps More Than 10 Percent in One Year, Pushing Total Unsold Inventory to 6.3 Million Units
skeptical
Pretty convincing analysis at a different site shows a strong correlation between inventory and rising/falling prices.
“six months’ of inventory seemed to mark the line between upward and downward pressure on home prices.”
http://piggington.com/home_prices_still_tracking_months_of_inventory
I’ll stick my neck out here and predict lower prices going forward.
billddrummer
@skeptical,
Safe. You’re not sticking your neck out very far.