InfoGraphic Attention Readers: At the end of last year, we posted a graphic showing Shadow Inventory levels for each state.
Wow! Louisiana has a 34 month supply of Shadow Inventory. It might be higher than that, really if BofA isn’t a part of those numbers.
There’s several definitions, I’m providing 2 below. This can also include local homes that are behind on their mortgage in Foreclosure Flags 1-3 and my experience in appraising these for lender record keeping of inventory is that it can take up to 3 years for these homes to finally become REOs.
Definition of ‘Shadow Inventory’:A term that refers to real estate properties that are either in foreclosure and have not yet been sold or homes that owners are delaying putting on the market until prices improve. Shadow inventory can create uncertainty about the best time to sell (for owners) and when a local market can expect full recovery. Also, shadow inventory typically causes reported data on housing inventory to understate the actual number of inventory in the market.
Read more: http://www.investopedia.com/terms/s/shadow-inventory.asp#ixzz1oGQgXUVu
Investopedia explains ‘Shadow Inventory’:
With the unprecedented number of foreclosures stemming from the subprime mortgage meltdown of 2007-2008 and the overall housing market collapse during that crisis, lenders were left with significant real estate holdings. Many lenders were slow to put their inventory up for sale for fear of flooding the market and further driving down prices, which would in turn lower their potential ROI.
Read more: http://www.investopedia.com/terms/s/shadow-inventory.asp#ixzz1oGRHeL1Q