It would take six months to sell all the distressed homes that have not yet hit the market -- a shorter time than a year ago, but still a worrisome number, according to national estimates by CoreLogic.
In January there were 1.6 million homes in the “shadow inventory” of homes with delinquent mortgages or other signs of distress that have not been listed for sale, the data provider reported Wednesday morning.
For every two homes on the market, one is in the shadows, according to CoreLogic. The number is virtually unchanged from October, but down from 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.
CoreLogic did not report on Long Island’s shadow inventory. However, the data provider found that 10.4 percent of homeowners in Nassau and Suffolk counties were at least 90 days delinquent on their loans in January, up slightly from 10.1 percent a year before. The Island has a 6.4 percent foreclosure rate, CoreLogic reported.
Of all the homes in the national shadow inventory, about half are seriously delinquent on their loans, one quarter are in some stage of foreclosure and one quarter are bank-owned, also known as REO, according to Core Logic.
“The shadow inventory remains persistent, even though many other metrics of the housing market show signs of improvements,” said Anand Nallathambi, president and chief executive of CoreLogic. “In some hard-hit markets, the demand for REO and distressed property is now outstripping supply. As we move into what is traditionally the peak selling season for real estate, servicers will certainly be watching closely to see if now is the time to move more inventory out of the shadows.”
CoreLogic estimates the shadow inventory by calculating the number of distressed properties not currently listed on multiple listing services that are seriously delinquent, in foreclosure or bank-owned.