Shadow Inventory?

house under a magnifying glass

If you listen to the media discussing the housing situation in the United States, you will inevitably hear the words “shadow inventory.” The definition of shadow inventory differs depending who’s doing the defining. For purposes of this blog, I’ll define it as “homes that have been foreclosed on, owned by a lender who’s holding them in their inventory rather than putting them on the market to sell.”

According to the media, there exists a huge amount of shadow inventory that could bring the housing market to its knees again and will probably drop housing prices another 10-20%. However, that isn’t what’s been happening in my experience.

I listed a short sale last spring and because the lender wouldn’t be reasonable about the asking price (this story is a blog in itself), the home eventually foreclosed and was taken back by the bank. Within a couple of days, the home was listed by another agent at a price below where I had it listed. The home has since sold.

I took some buyers out to view a listing in Nampa. After viewing the property, they decided to make an offer. As I always do, I ordered a package from a local title company to begin the due diligence on the home. I found out that the foreclosure auction had taken place that morning and the lender was now the owner of the property. With the help of the listing agent, I found out who would be listing it for the lender. I called that agent and found out that the property will be back on the market within a couple of weeks.

From everything I’m seeing shadow inventory doesn’t exist in the Boise area. But if it does, I wish the lenders would get the houses on the market. I have several buyers who would like to purchase a home but haven’t been able to find the right one. Maybe the “right one” could be found in the shadow inventory.

Posted In Blogroll, Real Estate Info

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