MortgageOrb: - CoreLogic: Shadow Inventory At January 2009 Levels

For every two homes available for sale, there is one home in the shadow inventory, new data shows.

According to CoreLogic, the residential shadow inventory totaled 1.6 million units in October, representing a supply of five months. Though down from 1.9 million units a year before, October's shadow inventory was approximately the same level as reported in January 2009.

The shadow inventory represents about half of the 3 million properties that are seriously delinquent, in foreclosure or in real estate owned (REO) status, CoreLogic explains. Of the 1.6 million properties in the shadow inventory, 770,000 units (2.5 months’ supply) are seriously delinquent, 430,000 (1.4 months’ supply) are in some stage of foreclosure and 370,000 (1.2 months’ supply) are already in REO.

“The shadow inventory overhang is a large impediment to the improvement in the housing market because it puts downward pressure on home prices, which hurts home sales and building activity while encouraging strategic defaults,” says Mark Fleming, chief economist at CoreLogic.

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