Inventory Decline For Residential Listing

Shadow Inventory Continues Rapid Decline, Down 28%   from Peak

The so-called shadow inventory continues   to shrink and is now down 28 percent from its high point   in January 2010.  According to the January 2013 shadow inventory report   from CoreLogic there are now 2.2 million homes in the inventory which it   calculates as properties that are seriously delinquent, in some stage of   foreclosure, or lender owned real estate (REO) that is not included on a   multiple listing service.

The January number is 18 percent lower it was   in January 2012 and represents a supply of nine months at the rate the   inventory is being resolved.  Transition rates of “delinquency to   foreclosure” and “foreclosure to REO” are used to identify the   currently distressed unlisted properties most likely to become REO.  The   number includes 85 percent of the 2.6 million properties currently seriously   delinquent, in foreclosure or REO.  Properties which are not currently   delinquent but likely to become so are not included in the figures.

“The shadow inventory continued to drop   at double the rate in January from prior-year levels. At this point in the   recovery, we are seeing healthy reductions across much of the nation,”   said Anand Nallathambi, president and CEO of CoreLogic.   “As we move forward in 2013, we need to see more progress in Florida,   New York, California, Illinois and New Jersey which now account for almost   half of the country’s remaining shadow inventory.”

“The shadow inventory is declining   steadily as properties are moving through the distressed   pipeline,” said Dr. Mark Fleming, chief economist for   CoreLogic. “States like Arizona, California and Colorado are   experiencing significant declines year over year in the stock of serious   delinquencies, a positive sign for further improvement in the shadow   inventory.”

Of the 2.2 million units, 1 million are   seriously delinquent, a 4.1 month’s supply; 798,000 are in some state of   foreclosure (3.2 months) and 342,000 have already been foreclosed (1.4 months   supply.)

The value of shadow inventory was $350   billion as of January 2013, down from $402 billion a year ago and down from   $381 billion six months ago.

The greatest annual improvements in   delinquencies, the main driver of the shadow inventory, occurred in Arizona   (-40 percent) and California (-33 percent).  Colorado, Michigan, and   Wyoming all saw delinquencies decrease by at least 23 percent.   As   of January 44 percent of all distressed properties in the country were   located in five states, Florida, California, New York, Illinois and New   Jersey with Florida alone carrying 16 percent.


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