“Shadow” Inventories: What They Can Tell Us
Two new reports estimate bank “shadow inventories,” or foreclosed homes that haven’t been put on the market, will peak soon and disappear entirely from the market by 2013. Some might accuse those analysts of wearing rose-colored glasses, but the housing market won’t recover until those “shadows” go away.
The first report comes from Barclays Capital (Stock Quote: BARC), which predicts the peak for shadow inventories will come soon. After that, the rest of 2010 will see a gradual decline in lenders’ foreclosed properties.
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In its forecast, Barclays includes not only homes already in foreclosure, but distressed homes where the mortgage loan is more than 90 days late in payment.
Altogether, Barclays estimates the total amount of each as follows:
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Total U.S. shadow home inventories
90-days late = 2.4 million loans
Foreclosed homes – 2.1 million
Total U.S. shadow inventory = 4.5 million homes
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