Where is this "Shadow" Inventory Everyone has been talking about?
Where Is the Shadow Inventory?
For the last year, the real estate industry has been talking about a "shadow" inventory of homes for sale that would appear from the a flood of distressed properties. Where are they?
It turns out we're not going to see them. Acording to a recent paper by Alan Mallach, of the Brookings Institution here's whats happening to them:
-Some delinquencies have been resolved through loan modifications or people working out the problems on their own.
-Banks are getting better at managing short sales.
-Investors are aggressively buying up properties, sometimes in bulk, directly from the banks or at courthouse auctions so they never hit the market.
The likeliest outcome, Mallach predicts, is a steady flow of foreclosures over a long timeframe that will prevent another crash in home prices, but will probably lead to low or no appreciation in home prices.
Source: The Wall Street Journal, Nick Timiaros (09/16/2010)
Posted at 10:10AM Sep 28, 2010 by Louisa Ward & Robyn Viktor in Real Estate | Comments[0]
