Shadow Inventory Declines, But Supply Still High

As of January 2011, the number of residential properties in shadow inventory fell to 1.8 million residential properties, representing a nine months’ supply, down from 2.0 million units from a year ago, also a nine months’ supply, according to CoreLogic. Of the current shadow inventory supply, 870,000 homes are seriously delinquent and 470,000 are bank-owned. Accelerated loan modifications and short sales can help reduce the inventory of distressed properties, say economists at CoreLogic.

In addition to the current shadow inventory, nearly 2 million current negative-equity loans are more than 50 percent “upside down” and will likely become shadow supply in the future. New Jersey, Illinois and Maryland have the highest levels of shadow inventory while North Dakota, Alaska and Wyoming had the lowest. Fri, Apr 1, 2011