Shadow inventory a diminishing threat to housing market recovery, report says
Posted on Wednesday, January 2, 2013 at 4:19:33 PM
The housing market improved significantly last year, but the nation's shadow inventory, which includes properties in some stage of the foreclosure crisis, could still be an obstacle.
However, a new report from CoreLogic indicates the nationwide shadow inventory thinned by 2.3 million units in October. This marked a 12.3 percent decline from a year earlier, when there were an estimated 2.6 million properties in the supply.
"Almost half of the properties in the shadow are delinquent and not yet foreclosed," said CoreLogic chief economist Mark Fleming. "Given the long foreclosure timelines in many states, the current shadow inventory stock represents little immediate threat to a significant swing in housing market supply."
In the wake of the foreclosure crisis, many prospective buyers took advantage of bargain property values in this inventory to make the transition to homeownership. However, with fewer options, these opportunities could diminish.
Luckily, homebuilding outlays increased 0.4 percent in November to an annual rate of $295.3 billion, according to the Department of Commerce. Prospective borrowers who use this development to purchase a home should utilize residential lending opportunities to make their transaction more affordable.