Residential shadow inventory fell in April to volume levels not seen since October 2008, said analytic provider CoreLogic.
As of April, the national shadow inventory was 1.5 million units, which represents a four-month supply. This is a 14.8% drop from a year ago when shadow inventory stood at 1.8 million units, or a six-month supply.
The 1.5 million units considered to be shadow inventory make up over half of the 2.8 million properties that are currently seriously delinquent, in foreclosure or REO.
Out of the shadow inventory properties, 720,000 units (two-month supply) are seriously delinquent, while 410,000 are in some stage of foreclosure and 390,000 are already in REO. Both of these figures make up a one-month supply of inventory.
CoreLogic said the equal volume of short sales and REO sales has offset the flow of new seriously delinquent loans into the shadow inventory.
Serious delinquencies, which CoreLogic said is the main driver of the shadow inventory, declined the most in Arizona by 37%, followed by California (down 28%), Nevada (27.4%), Michigan (23.7%) and Minnesota (18.1%).
Mark Fleming, chief economist for Santa Ana, Calif.-based CoreLogic, said the decline in the shadow inventory is a positive development for the housing industry, particularly for home prices.
“Since peaking at 2.1 million units in January 2010, the shadow inventory has fallen by 28%,” Fleming said. “This is one of the reasons why some markets that were formerly identified as deeply distressed, like Arizona, California and Nevada, are now experiencing price increases.”
