TODAY'S PAPER
61° Good Morning
61° Good Morning
ClassifiedsReal Estate

Report: 5-month supply of homes in the 'shadows'

Over the past five years, Long Island's poverty

Over the past five years, Long Island's poverty rate rose while median household incomes declined, according to U.S. Census Bureau data. Photo Credit: iStock

For every two homes available for sale, there’s one home lurking in the “shadows,” according to national estimates by CoreLogic.

“Shadow inventory” – the stock of distressed properties that have not yet hit the market – remained at 1.6 million units, representing a five-month supply as of October 2011, CoreLogic reports. This was down from October 2010, when shadow inventory stood at 1.9 million units, or 7-months' supply, but approximately the same level as reported in July 2011.

A healthy housing market should have less than one-month's supply of shadow inventory, which typically could be absorbed with minimal impact on home prices, the report says.

"The shadow inventory overhang is a large impediment to the improvement in the housing market because it puts downward pressure on home prices, which hurts home sales and building activity while encouraging strategic defaults," said Mark Fleming, chief economist for CoreLogic.

CoreLogic estimates the shadow inventory by calculating the number of distressed properties not currently on Multiple Listing Services that are seriously delinquent (90 days or more), in foreclosure and real estate owned (REO) by lenders.

The report did not include data on Long Island’s shadow inventory, but in Nassau-Suffolk, the mortgage delinquency rate has increased. According to CoreLogic data for September 2011, 10.07 percent of mortgage loans were 90 days or more delinquent compared to 9.80 percent for the same period last year -- an increase of 0.27 percentage points.

Comments

We're revamping our Comments section. Learn more and share your input.

More news