Tag Archives: shadow inventory


Shadow Inventory Shrinking…in Most Regions

The Mortgage Bankers Association (MBA) released their 3rd Quarter Delinquency Survey last week. The report revealed that both the delinquency and shadow inventory numbers are improving. DSNews, reporting on the survey, explained:

“The Mortgage Bankers Association noted in a Thursday report that a four-year low in serious mortgage delinquencies and a drop in the percentage of loans in foreclosure for the third quarter suggest fewer homes are part of the shadow inventory that’s always threatening prices and creating market uncertainty.”

This is great news. However, we must realize two things:

  • The inventory level is still four-times the normal average
  • Foreclosure backlogs still exist in certain judicial foreclosure states

Back in September, we explained that the foreclosure challenge in most parts of the country is diminishing with the major exception being the Northeast. A new report confirms that states in the Northeast are now leading the nation in percentage increase in foreclosure activity. In Realty Trac’s latest Foreclosure Market Report, it was revealed that:

“The three states with the biggest annual increases in foreclosure activity in October were New Jersey (140 percent), New York (123 percent) and Connecticut (41 percent).”

These same states were rocked by super storm Sandy which will result in a continued delay in these properties coming to market. RealtyTrac’s vice president Daren Blomquist explains:

“We continued to see vastly different foreclosure trends across the country in October, depending primarily on how each state’s foreclosing infrastructure was able to handle the high volume of delinquent loans during the worst of the foreclosure crisis in 2010. Unfortunately the three states dealing with the biggest rebound in deferred foreclosure activity— New Jersey, New York and Connecticut — also had to deal with the devastation to homes inflicted by super storm Sandy. The foreclosure moratoriums being put into effect as a result of the storm will likely extend the already-lengthy time to foreclose in these states, further prolonging a fundamentally sound housing recovery.”

Things are looking better in the vast majority of communities across the country. However, the Northeast should still be looking for prices to soften as Mark Zandi of Moody’s Ecnomy explained in a recent Wall Street Journal article:

“Some markets are still going to suffer more price declines.”

 

By: The KCM Crew, KCM Blog


Once-Invisible Inventory Can Be Seen on Zillow

Instead of finding clever ways to chase shadow inventory, Zillow has decided to make things easy for thrill-seeking homebuyers and investors who are trying to track down unlisted, invisible inventory.

The real estate data provider announced Thursday it is now providing information on 1.2 million pre-foreclosure and foreclosed properties at no cost. The homes provided through Zillow are not yet listed and apparently, are yet to be found on any Multiple Listing Service (MLS).

Before, only certain investors were privy to such information.

“For the first time, home shoppers are able to see the entire scope of housing inventory in their area, both pre-market and for-sale, side by side,” the company said in a release.

According to Zillow, 55 percent of homebuyers have considered purchasing a foreclosure, but the problem was where to find the information.

“This is another tremendous step forward in consumer empowerment. Zillow is taking information that was really only available to a select group – in this case, savvy investors – and making it more easily available to interested home buyers,” said Spencer Rascoff, Zillow’s CEO. “What’s more, bringing this information to light, and taking this inventory out of the shadows, can help bring these homes to market faster than ever before.”“

The pre-market inventory includes nearly 1 million pre-foreclosure properties, or homes that have begun the foreclosure process or have been scheduled for auction.

In addition, Zillow’s inventory has more than 260,000 unlisted foreclosed properties.

Zillow will also include its own estimate of the sale price of the home if sold as a foreclosure with the percentage and dollar discount based on fair market value. Foreclosure details will also be included, such as the timeline of the foreclosure process, unpaid balance, and the lender.

Another added feature will be 147,000 Make Me Move properties. For this feature, homeowners name a price for which they might sell their home.

Users can view pre-foreclosure, foreclosed, and Make Me Move inventory by visiting Zillow.com and conducting a search using the pre-market filter. Foreclosure details are available for those who sign in.

Seattle-based Zillow is a real estate information marketplace and provides information about homes, real estate listings, rental listings, and mortgages through its mobile applications and websites.

By: Esther Cho, DSNews


Distressed Dispositions Outpace New Delinquencies as Shadows Shrink

The industry’s shadows are shrinking, according to CoreLogic. The residential shadow inventory of unlisted REOs and soon-to-be REOs stood at 1.6 million units as of July 2011, based on the analytics firm’s calculations. CoreLogic says that tally represents a supply of five months and is down from 1.7 million units in April and 1.9 million units in July of 2010.

“The moderate decline in shadow inventory is being driven by a pace of new delinquencies that is slower than the disposition pace of distressed assets,” CoreLogic said in a report released Tuesday. CoreLogic estimates the current stock of properties in the shadow inventory by calculating the number of distressed properties not currently listed on multiple listing services that are seriously delinquent (90 days or more), in foreclosure, and real estate owned (REO) by lenders. Of the 1.6 million properties currently in the shadow inventory, CoreLogic’s study shows that 770,000 units are seriously delinquent (2.2-months’ supply), 430,000 are in some stage of foreclosure (1.2-months’ supply) and 390,000 are already in REO (1.1-months’ supply). As of July 2011 the shadow inventory is 22 percent lower than its peak level, reported by CoreLogic to be 2 million units, or an 8.4-months’ supply, in January 2010.

The company also highlighted the fact that the aggregate current mortgage debt outstanding of the shadow inventory was $336 billion in July 2011, down 18 percent from $411 billion a year earlier.

“The steady improvement in the shadow inventory is a positive development for the housing market,” said Mark Fleming, chief economist for CoreLogic. “However, continued price declines, high levels of negative equity, and a sluggish labor market will keep the shadow supply elevated for an extended period of time.”

Based on CoreLogic’s market assessment, the total housing inventory – including both the shadow inventory and visible inventory listed for sale – was 5.4 million units in July of this year, down from 6.1 million units 12 months earlier.
The shadow inventory accounts for 29 percent of the combined shadow and visible inventories.