The current shadow inventory of residential properties fell to 1.5 million units as of April, a 14.8% year-over-year decline, according to new data from Santa Ana, Calif.-based CoreLogic.
CoreLogic determines that April's shadow inventory – representing a supply of four months – is approximately the same level as the country was experiencing in October 2008.
Of the 1.5 million properties currently in the shadow inventory, 720,000 units are seriously delinquent (two months' supply), 410,000 are in some stage of foreclosure (1.1-months' supply) and 390,000 are already designated as real estate owned (1.1-months' supply). Furthermore, the dollar volume of shadow inventory was $246 billion as of April, down from $270 billion a year ago and representing a three-year low.
Serious delinquencies, which are the main driver of the shadow inventory, declined the most in Arizona (-37%), California (-28%), Nevada (-27.4%), Michigan (-23.7%) and Minnesota (-18.1%).
‘Since peaking at 2.1 million units in January 2010, the shadow inventory has fallen by 28 percent,’ says Mark Fleming, chief economist at CoreLogic. ‘The decline in the shadow inventory is a positive development because it removes some of the downward pressure on house prices.’ said ‘This is one of the reasons why some markets that were formerly identified as deeply distressed, like Arizona, California and Nevada, are now experiencing price increases.’