Cherry Creek Properties LLC
Listening to Buyers, Sellers and Realtors on Trulia; the Shadow Inventory is HUMUNGUS!!!
Abandoned and Vacant houses are common in every city.
Scammers are taking advantage of these.
Cities are passing Ordinances about Vacant Houses and the care of the Houses and Lawns.
Vandals and Grafetti artists are a real problem.
Realtors are afraid to show these properties.
There are approximately 700 cities in the US with a population over 50,000. If they had only 100 of these abandoned foreclosures each, that would amount to 7 trillion dollors worth of homes.
Do you think that Detroit as only 100?
I don't believe Denver has a shadow inventory of homes ready to be sold. The inventory that is sitting is due to the banks inability to line up necessary paperwork to complete a transaction-be it a short or foreclosure.
And we all know what they say about opinions!
A Realtor quoted by John Rebchook's Inside Real Estate blog was almost apologetic that he had ever uttered the words "shadow inventory." He had to admit he might be wrong about it. Does he actually know? Who does know?
I would wager the banks may have quietly removed the Denver area inventory through short sales. We've seen foreclosures drop steadily for years (and Colorado is still in 11th or 12th place in the nation). We're not going to see as many foreclosures in an improving economy. The local story may well be there is no shadow inventory.
Then again ... If there is shadow inventory, why would they tell us? Does it help the banks to tip their hand? If they have a slew of homes to move off the books, are they going to let that information go public? Seems to me, that doesn't serve their interest.
With multiple offers greeting listings these days, the banks can be cheered by this turn of events. Will they suddenly flood the market with everything they have got? I like Cory's answer. Why would they swamp the boat? They'll release what the market needs and allow the market to regain its confidence.
Investors are still very active. I read a story today on MarketWatch.com that investors are buying real estate versus corporate shares. That should underline confidence. We're also reading that 40 percent of homes sold were sold to investors. I have no data I can point to that indicates what that figure is for Denver. But, I bet it's close.
Private sellers have not returned in numbers that will impress any of us. Move-up buyers are not moving. With prices having recovered to the 2007 level, that should mean a lot of people are in the black. The echo boomers, the sons and daughters of boomers, are coming into that high income stage of life. Will we see this buyer out there this spring?
Best to all of you,
Good Luck to you
Edith YourRealtor4Life & Chicago, North Shore & Northern Illinois Expert
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That is the $64K question. Good answer from Kasha. Also the banks are under the gun to try to keep people in there homes, and sometimes at all costs. Even to deals to foreclose and rent back the home. The refinancing and restructuring of loans is also keeping homes off the market. Some homes are being released methodically with one thought as to not flood the market and drive the home prices back down after the recent upturn, especially in Colorado. Meanwhile the numbers are going down as to families going into foreclosure now and the overall numbers of foreclosure and shadow inventory are dwindling like a slow drain. The effect of robo-signing is still in place which is making banks more cautious to get all of their ducks in a row before making a move and getting sued by homeowners who have not made a payment in over a year at times. It will be good to hear the other answers as they respond to your question here on Trulia. Thanks for venturing into this area.
Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246