Shadow Inventory Falls 10%, Threat Remains

Shadow inventory--distressed properties not yet listed for sale--has decreased about 10 percent compared to a year earlier, according to CoreLogic.

While the decrease has been viewed as a welcome sign to housing experts, shadow inventory still remains a threat to a housing recovery, even at a time when the housing market has shown other signs of improvement in recent weeks.

For every two homes available for sale in the country, one home awaits in the “shadows,” HousingWire reports about the data.

In January, shadow inventory accounted for 1.6 million units, which is a six-month supply. In January 2011, that number stood at 1.8 million units, an eight-month supply.

“Almost half of the shadow inventory is not yet in the foreclosure process,” says Mark Fleming, CoreLogic’s chief economist. “Shadow inventory also remains concentrated in states impacted by sharp price declines and states with long foreclosure timelines.”

The top six states that account for most of the nation’s shadow inventory:

•Florida
•California
•Illinois
•New York
•Texas
•New Jersey
Source: “U.S. Shadow Inventory Levels Down From Year Ago,” HousingWire (March 21, 2012)