Despite a shadow inventory of 1.6 million seriously delinquent loans, and a huge inventory of foreclosures, nearly 50% of 900 housing markets tracked by CoreLogic registered price gains last year.
CoreLogic chief economist Mark Fleming labeled the improvement “quite a turnaround” from 2009 when 90% of markets posted declines.
“The shadow inventory doesn't mean we can't have, in many parts of this country, home price growth,” Fleming said during a speech Friday.
The $26 billion robo-signing settlement is expected to remove processing road blocks and speed up the sale of foreclosed properties in the shadow inventory.
Speaking at a Capitol Hill panel discussion on housing issues, Fleming noted that it will take 18 months for the shadow inventory (loans that are 90-days or more past due, in foreclosure/REO not listed for sale yet) to work its way through the system. The luncheon was sponsored by mortgage insurer Radian.
Currently, there is a five- to six-month supply of existing homes for sale -- and the shadow inventory will add another two-month supply.
Fleming called an eight-month supply “unhealthy,” noting that it puts “downward pressure on prices.”
A four- to five-month supply of homes on the market is considered healthy or neutral because it doesn't exert upward or downward pressure on home values.
Overall, the CoreLogic chief economist says he is seeing signs of improvement in the economy, labor markets and housing. “I feel like it is heading in the right direction,” Fleming said.
