There’s been a lot of discussion about Shadow Inventory around the internet over the last year or so. I can hear those of you not in the industry saying “What in the bleep is shadow inventory?!”
Shadow Inventory is the amount of homes the banks are ultimately going to foreclose on and put on the market as For Sale by Bank REO, but which they haven’t actively started the foreclosure process yet. Most Short Sales fall into this category. There are also many homeowners who are 2-3 months behind on their mortgage payments (or more), whom the bank doesn’t have the time, manpower, or inclination to “deal with” yet.
The general talking point is that the market can’t heal until all this inventory is cleared out. However, reports have varied widely about how much shadow inventory actually exists and what data can be used to collect it.
Either way, it was nice to read a Standard & Poor (S & P) report on housingwire.com showing Phoenix being in the best shape of any city in the top 20 metropolitan areas, with *only* 16 months of shadow inventory. (compared with, for example, New York City’s 8.5 years’ worth!)
Does this mean we’re still on track for a Phoenix-area recovery to begin in late 2011?
Your hopes so Realtor,