Residential shadow inventory continued to shrink in July compared to a year ago, CoreLogic said in its latest data report.
As of July 2012, shadow inventory fell to 2.3 million units, representing a supply of six months. This is 10.2% less than the same time period last year when shadow inventory stood at 2.6 million housing units.
Of the 2.3 million properties currently in the shadow inventory, 1 million units are seriously delinquent (nearly three months’ supply), 900,000 are in some stage of foreclosure (two and a half months’ supply) and 345,000 are already in REO (one months’ supply).
Since April, serious delinquencies, which are the main driver of the shadow inventory, have declined the most in Arizona, Pennsylvania, New Jersey, Delaware and Maine.
“The reduction in shadow inventory is being driven by a variety of resolution approaches. This is yet another hopeful sign that the housing market is slowly healing,” said Anand Nallathambi, president and CEO of
Through July, CoreLogic said Florida, California, Illinois, New York and New Jersey make up 45% of all distressed properties in the country.
Due to the reduction of properties considered to be in shadow inventory, the Irvine, Calif.-based analytic provider foreshadows a rise in
“The decline in shadow inventory has recently moderated reflecting the lower outflow of distressed sales over the past year,” said Mark Fleming, chief economist for CoreLogic. “While a lower outflow of distressed sales helps alleviate downward home price pressure, long foreclosure timelines in some parts of the country causes these pools of shadow inventory to remain in limbo for an extended period of time.”
