The current residential shadow inventory declined to 1.6 million units in July, representing a supply of five months, according to new data from Santa Ana, Calif.-based CoreLogic. This represents a drop from 1.9 million units – a supply of six months – in July 2010 and a 22% drop from the January 2010 peak of 2 million units.
CoreLogic estimates that of the 1.6 million properties currently in the shadow inventory, 770,000 units are seriously delinquent, 430,000 are in some stage of foreclosure and 390,000 are at the real estate owned stage.
‘The steady improvement in the shadow inventory is a positive development for the housing market,’ says Mark Fleming, chief economist at CoreLogic. ‘However, continued price declines, high levels of negative equity and a sluggish labor market will keep the shadow supply elevated for an extended period of time.’