Housing

The Good, The Bad, And The Insignificant: Shadow Foreclosures Surge

Verdict: Very Bad

Shadow inventory of unsold homes jumped in the month of August, according to CoreLogic

“CoreLogic estimates shadow inventory, sometimes called pending supply, by calculating the number of properties that are seriously delinquent (90 days or more), in foreclosure and real estate owned (REO) by lenders and that are not currently listed on multiple listing services (MLSs). Shadow inventory is typically not included in the official metrics of unsold inventory.”

The number rose to 2.1 million in August from 1.9 million in the same month a year ago.

“The total visible and shadow inventory was 6.3 million units in August, up from 6.1 million a year ago. The total months’ supply of unsold homes was 23 months in August, up from 17 months a year ago.”

The news, added to RealtyTrac data which shows that foreclosures remain above 300,000 a month, points to the fact that there is absolutely no recovery in the housing market. S&P recently predicted that home values will drop another 7% to 10% next year.

Douglas A. McIntyre