Archive for October, 2013

Shadow Inventory Falls to Lowest Level Since August 2008


Overall residential shadow inventory, as of July 2013, was 1.9 million homes, according to CoreLogic. That’s the lowest shadow inventory tally reported since August 2008.

The industry’s current shadow inventory carries a value of $293 billion by CoreLogic’s assessment, down from $380 billion in July 2012.

It represents 3.7 months’ of supply and accounts for 85 percent of the 2.2 million properties that were seriously delinquent, in foreclosure, or bank-owned at July month-end.

Of the fewer than 2 million properties in the shadow inventory, 874,000 properties were seriously delinquent

(1.8 months’ supply), 661,000 were in some stage of foreclosure (1.3 months’ supply), and 318,000 were already in REO (0.6 months’ supply).

July’s count of homes lurking in the shadows was down 22 percent from a year earlier, when CoreLogic says shadow inventory stood at 2.4 million homes. Shadow inventory reached a peak of 3 million homes in 2010. As of July, it’s fallen 38 percent from that point.

“Over the past year, the value of the U.S. shadow inventory dropped by $87 billion-a sign of increased normalcy in the housing market,” said Anand Nallathambi, president and CEOof CoreLogic. “With a year-over-year decrease of 22 percent in July, the shadow inventory has now declined steadily for 10 consecutive months.”

CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of properties that are seriously delinquent, in foreclosure, or held as REO by mortgage servicers but not currently listed on multiple listing services (MLSs).

Transition rates of “delinquency to foreclosure” and “foreclosure to REO” are used to identify the currently distressed unlisted properties most likely to become REO properties. Properties that are not yet delinquent but may become delinquent in the future are not included in CoreLogic’s estimate of the current shadow inventory.

Clear Capital Report Shows New Top Markets


San Francisco and Detroit led the housing market rebound according to the September Home Data Index released Tuesday by Clear Capital.

San Francisco led metro price performance in September, with 4.4 percent quarterly growth and 28.3 percent yearly growth. Detroit home prices saw 4.3 percent and 23.3 percent in quarterly and yearly growth, respectively.

National home price gains in September picked up to 10.9 percent year-over-year, which Clear Capital attributed to residual summer buying activity.

“While national and regional rates showed more of the same in September, an interesting dichotomy is unfolding beneath the surface,” said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital.

“Strong performances in San Francisco and Detroit remind us that in a dynamic market, the only constant is change. For about a year and a half now, we’ve been focused on First-In, First-Out recoveries characterized by hard hit markets attracting investor interest, like Miami, Phoenix and Las Vegas. Now as the recovery matures, we see home buyers re-engaging in markets that haven’t fit the typical investor profile.”

San Francisco median home prices stood at $600,000 in September according to the report, while the median price in Detroit was $107,500. The national median home price was $215,000.

“San Francisco REO saturation remains low, at 6.3 percent, yet Detroit REO saturation remains relatively high and much improved, at 31.7 percent,” the report noted. “Yet over the last four years, REO saturation in Detroit has been cut in half. Just over the last six months, REO saturation fell by 11.5 percentage points.”

“Detroit was arguably one of the hardest hit in the country and is finally seeing a recovery with 23.3% growth over the year. Detroit’s struggle with relatively high REO saturation over the last several years delayed recovery,” Villacorta said. “Now, low price points and recent improvements in REO saturation, a key precursor to recovery, are driving gains. On the other hand, San Francisco’s median home price at $600,000 suggests non-investor home buyer demand is materializing, supported by its relatively strong local economy.”