CL Report: 8 months of 'shadow inventory' = REOs could weigh on price appreciation, exacerbate declines + Shadow Housing Inventory Jumps To 2.1 Million, Pushing Total Supply Back To Crisis Levels

[mEDITate-OR:

panic, one more time...

This is what Jim @ CR tells U.S.:

The total visible and shadow inventory was 6.3 million units in August, up from 6.1 million a year ago. The total months’ supply of unsold homes was 23 months in August, up from 17 months a year ago. Although it can vary and it depends on the market and real estate cycle, typically a reading of six to seven months is considered normal so the current total months’ supply is roughly three times the normal rate.

And this explanation from Jim@CR is a much better view about what the "shadow inventory" really is:

The term "shadow inventory" is used in many different ways. My definition is: housing units that are not currently listed on the market, but will probably be listed soon. This includes:

1. REOs, foreclosures in process and some percentage of seriously delinquent loans. This is the number CoreLogic is estimating.

2. Unlisted new high rise condos. This also includes high rise condos that were converted to rental units with the intention of eventually selling the units. Note: these properties are not included in the new home inventory report and are not included in the CoreLogic report. These is no data for the number of units nationwide, and these have to be counted on a city by city basis (Las Vegas and Miami have many of these units).

3. Homeowners waiting for a better market. This includes the "accidental landlords" who rented their properties and who will try to sell as soon as the market improves after the current tenant's lease expires.

Although the CoreLogic report is useful in estimating future supply, I think it is the visible supply that impacts prices.

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CL Report: 8 months of 'shadow inventory'
REOs could weigh on price appreciation, exacerbate declines
http://www.inman.com/news/2010/11/22/report-8-months-shadow-inventory
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Shadow Housing Inventory Jumps To 2.1 Million
Pushing Total Supply Back To Crisis Levels
http://www.businessinsider.com/corelogic-shadow-inventory-2010-11
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CoreLogic: Shadow Housing Inventory
pushes total unsold inventory to 6.3 million units
http://www.calculatedriskblog.com/2010/11/corelogic-shadow-housing-inventory.html
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