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Shadow inventory continues to decline
CoreLogic reported this week that the current residential shadow inventory fell to 2.3 million units, representing a supply of six months, as of July. This was a 10.2 percent drop from
July 2011, when shadow inventory stood at 2.6 million units, which is approximately the same level the country was experiencing in March 2009. Currently, the flow of new seriously delinquent (90 days or more) loans into the shadow inventory has been roughly offset by the equal volume of distressed (short and real estate-owned) sales.
“The decline in shadow inventory has recently moderated, reflecting the lower outflow of distressed sales over the past year,” said Mark Fleming, chief economist for CoreLogic. “While a lower outflow of distressed sales helps alleviate downward home price pressure, long foreclosure timelines in some parts of the country causes these pools of shadow inventory to remain in limbo for an extended period of time.”
Highlights from the report include:
- As of July 2012, shadow inventory fell to 2.3 million units or six-months’ supply and represented just over three-fourths of the 2.7 million properties currently seriously delinquent, in foreclosure or in REO.
- Of the 2.3 million properties currently in the shadow inventory 1 million units are seriously delinquent (2.9 months’ supply), 900,000 are in some stage of foreclosure (2.5-months’ supply) and 345,000 are already in REO (1.0-months’ supply).
- Serious delinquencies, which are the main driver of the shadow inventory, declined the most from April 2012 to July 2012 in Arizona, 3.2 percent; Pennsylvania, 2.8 percent; New Jersey, 2.3 percent; Delaware, 2.2 percent; and Maine, 2.2 percent.
- As of July 2012, Florida, California, Illinois, New York, and New Jersey make up 45 percent of all distressed properties in the country.
As for foreclosures
- The five states with the highest number of completed foreclosures for the 12 months ending in August 2012 were: California, 110,000; Florida, 92,000; Michigan, 62,000; Texas, 58,000; and Georgia, 55,000. These five states account for 48.1 percent of all completed foreclosures nationally.
- The five states with the lowest number of completed foreclosures for the 12 months ending in August 2012 were: South Dakota, 25; District of Columbia, 113; Hawaii, 435; North Dakota, 564; and Maine, 612.
- The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida, 11 percent; New Jersey, 6.5 percent; New York, 5.2 percent; Illinois, 4.8 percent; and Nevada, 4.6 percent.
- The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming, 0.5 percent; Alaska, 0.8 percent; North Dakota, 0.8 percent; Nebraska, 0.9 percent; and South Dakota, 1.1 percent.