“Shadow Inventory” May Not Be as Bad as Some Thought

“Shadow Inventory” is a term being used now to describe those properties that are not currently on market but are already foreclosed on by banks but being held back.  In some cases it also includes properties that are potential short sales or future foreclosures.

It may be something you haven’t heard about before but then had you heard the term ‘short sale’ before 2005 or so?

There have been articles in the media and some in the real estate profession that have warned about the upcoming mess that we will be in when this shadow inventory starts to hit the market but I’ve been saying for months that it is actually welcome at this point considering the shortage in our inventory currently.

Here’s an article that discusses this subject:

Shadow inventory of homes may not be so scary

By Michael Pollick  Last Modified: Wednesday, August 8, 2012 at 5:21 p.m

Shadow inventory, the last bogeyman that could derail Southwest Florida’s real estate recovery, may not be so scary after all.

But these days, few but the most pessimistic market experts expect that to happen. Shadow inventory has already shrunk — it started falling in early 2010, Tucillo says. And banks seem to have moved beyond the panic stage, recognizing that flooding the market only hurts themselves….More at Shadow inventory of homes may not be so scary

This is a fairly lengthy article but well worth reading as it goes into more detail about some of the issues that banks are facing that will prevent them from just dumping a bunch of inventory on the market.

It also goes over the point I’ve been making for a while about the overall inventory situation and that it would actually be helpful to get some of these properties on the market for buyers.

The irony is that real estate agents cannot get enough distressed homes and condos to sell at a time when demand is strong.

The ones they do get their hands on often attract multiple offers reminiscent of the boom-era fever.

“People are snapping them up like hotcakes,” said Shannon Moore, a broker at Green Lion Realty, who works in North Port and Charlotte County. “We sell a lot of them before we even get them listed.”…More at Shadow inventory of homes may not be so scary