Foreclosure Shadow Inventory Continues to Decline

CoreLogic, a leading supplier of Real Estate related information, reported today that the current shadow inventory of residential properties has declined to 1.7 million in April 2011. This is down from 1.9 million units in April of 2010. This new level represents a five months supply of homes. The decline is attributed to fewer new delinquencies and a high level of distressed sales. The shadow inventory is calculated by the number of distressed properties that are not currently listed in the MLS that are 90 or more days delinquent.   Data Highlights include:

  • The shadow inventory of residential properties as of April 2011 fell to 1.7 million units, or five months’ worth of supply, down from 1.9 million units, also five months’ supply, as compared to April 2010.
  • Of the 1.7 million current shadow inventory supply, 790,000 units are seriously delinquent (2.6 months’ supply), 440,000 are in some stage of foreclosure (1.4 months’ supply) and 440,000 are already in REO (1.4 months’ supply).
  • The shadow inventory peaked in January 2010 at 2 million units, 8.5 months’ supply, and stands 18 percent lower than the peak as of April 2011.
  • The total shadow and visible inventory was 5.7 million units in April 2011, down from 6.2 million units a year ago. The decline occurred in both the visible and shadow inventories. The shadow inventory accounts for 29 percent of the combined shadow and visible inventories.
  • In addition to the current shadow inventory, there are 2 million current negative equity loans that are more than 50 percent or $150,000 “upside down.” These current but underwater loans have increased risk of entering the shadow inventory if the owners’ ability to pay is impaired while significantly underwater.


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