Homes 'in shadows' weigh on sales market
A Mobile Foreclosure Prevention Center of the state Department of Financial Services offers financially stressed home owners information on resolving their issues. The van was parked this past week at the Marjorie R. Post Community Park in Massapequa. (March 16, 2012) Credit: Ed Betz
It would take six months to sell all the distressed homes in the United States that have not yet hit the market -- a shorter time than a year ago, but still a bad sign for the housing market, according to national estimates by CoreLogic.
The real estate market in the country -- and on Long Island -- continues to be weighed down by distressed properties listed for sale and in the "shadow inventory" as well.
In January there were 1.6 million U.S. homes in the shadow inventory: homes with delinquent mortgages or other signs of trouble that have not been listed for sale, the data provider reported Wednesday.
For every two homes on the market, another one is in the shadows, according to CoreLogic. The number is down compared to last January, when there were 1.8 million homes in the shadows -- an eight-month supply.
A healthy real estate market would have less than a one-month supply of "shadow" homes, which could be absorbed without dragging prices down by much, according to the data provider.
In Nassau and Suffolk counties, CoreLogic found that 10.4 percent of homeowners with mortgages were at least 90 days delinquent in January, up slightly from 10.1 percent a year before. Among Long Island homes with mortgages, 6.4 percent were in foreclosure in January, up from 5.7 percent a year earlier. CoreLogic did not report on shadow inventory on Long Island.
More than 1,500 homeowners on the Island have received notices of pending foreclosure lawsuits by lenders so far this year, according to the Long Island Real Estate Report. Lenders filed 1,943 such notices -- an early stage of the foreclosure process -- in the fourth quarter of last year, compared to 2,489 in the same period a year earlier, the local group found. Last month's $25-billion settlement with major banks due to the documentation scandal is expected to unleash a flood of new filings.
Lenders repossessed 38 Island homes last month, compared to 34 in the previous February, according to RealtyTrac.
Nationally, "the shadow inventory remains persistent, even though many other metrics of the housing market show signs of improvements," Anand Nallathambi, president and chief executive of CoreLogic, said in a statement.
CoreLogic estimates the shadow inventory by calculating the number of distressed properties that are seriously delinquent, in foreclosure or bank-owned and not currently on multiple listing services.
