From Inman News:
Lenders had a “shadow inventory” of 1.6 million distressed properties and repossessed homes they hadn’t yet put up for sale at the end of October, down 16 percent from a year ago, loan data and analytics provider CoreLogic reported today.
Six states account for half of the shadow inventory: Florida, California, Illinois, New York, Texas and New Jersey.
Housing analysts track shadow inventory because it’s typically not included in the official metrics of unsold inventory, and represents a pending supply of homes. CoreLogic estimates that for every two homes listed for sale in a multiple listing service (MLS), lenders have another one in shadow inventory.
The current level of shadow inventory represents a five-month supply of homes, down from a seven-month supply in October 2010, when shadow inventory stood at 1.9 million units.
Shadow inventory should represent less than a one-month supply of homes in a healthy housing market, CoreLogic said. At the peak of the housing bubble, in mid-2006, shadow inventory stood at 380,000 homes.