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CoreLogic; Shadow Inventory October 2011 Still at January 2009 Level; Atlanta, GA 40 Percent of Sales Distressed
Posted under: Home Buying in Atlanta,
Home Selling in Atlanta,
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December 22, 2011 5:10 AM |
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CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, reported today that the current residential shadow inventory as of October 2011 remained at 1.6 million units, representing a supply of 5 months. This means that for every two homes available for sale, there is one home "in the shadows."
This is approximately the same level as reported in July 2011. Currently, the flow of new seriously delinquent loans into the shadow inventory has been offset by the roughly equal flow of distressed (short and real estate owned) sales.
This is approximately the same level as reported in July 2011. Currently, the flow of new seriously delinquent loans into the shadow inventory has been offset by the roughly equal flow of distressed (short and real estate owned) sales.
According to CoreLogic, they estimate the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of distressed properties not currently listed on multiple listing services (MLSs) that are seriously delinquent (90 days or more), in foreclosure and real estate owned (REO) by lenders. Transition rates of “delinquency to foreclosure” and “foreclosure to REO” are used to identify the currently distressed non-listed properties most likely to become REO properties. Properties that are not yet delinquent but may become delinquent in the future are not included in the estimate of the current shadow inventory. Shadow inventory is typically not included in the official metrics of unsold inventory.
Of the 1.6 million properties currently in the shadow inventory, properties not visible to the market yet, (Figures 1 and 2), 770,000 units are seriously delinquent (2.5-months’ supply), 430,000 are in some stage of foreclosure (1.4-months’ supply) and 370,000 are already in REO (1.2-months’ supply).
Shadow inventory is four times higher than its low point at the peak of the housing bubble in mid-2006. A healthy housing market should have less than one-month’s supply of shadow inventory, which would be an easily absorbed stock of distressed assets with little or no discernible impact on house prices, unless the inventory was geographically concentrated.
Added to this, Lender Processing Services Inc., estimates that there are 2.2 million foreclosure homes currently in bank inventory, as compared to "pending REO, Foreclosure, or seriously deliquent above." This gives us a grand total of approximately 3.9 million homes seriously deliquent in "the shadows" to foreclosed upon at this time.
Added to this, Lender Processing Services Inc., estimates that there are 2.2 million foreclosure homes currently in bank inventory, as compared to "pending REO, Foreclosure, or seriously deliquent above." This gives us a grand total of approximately 3.9 million homes seriously deliquent in "the shadows" to foreclosed upon at this time.
“The shadow inventory overhang is a large impediment to the improvement in the housing market
because it puts downward pressure on home prices, which hurts home sales and building activity while encouraging strategic defaults,” said Mark Fleming, chief economist for CoreLogic.
Sales last month of distressed properties comprised almost 30 percent of all nationwide home sales. Short sales making up 10 percent and REOs or bank owned homes 19 percent. According to Georgia MLS, if I take a radius of 30 miles out from Atlanta, GA we find over the past 30 days a total of 2,586 home sales. Of these 1,041 were distressed sales with 909 as bank owned REO sales and 132 short sales for a total of 40 percent of homes sold in Atlanta, Georgia being classified as distressed sales as compared to the national average of 29 percent.
hankbailey.prudentialgeorgia.com
Sales last month of distressed properties comprised almost 30 percent of all nationwide home sales. Short sales making up 10 percent and REOs or bank owned homes 19 percent. According to Georgia MLS, if I take a radius of 30 miles out from Atlanta, GA we find over the past 30 days a total of 2,586 home sales. Of these 1,041 were distressed sales with 909 as bank owned REO sales and 132 short sales for a total of 40 percent of homes sold in Atlanta, Georgia being classified as distressed sales as compared to the national average of 29 percent.
hankbailey.prudentialgeorgia.com
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