US Records Falling Distressed Properties
11 July 2011
According to new data by financial and property research company CoreLogic the number of distressed properties (the dreaded 'shadow inventory') dropped this April compared to last April. According to the firm there were 1.7 million distressed properties in April this year, down from 1.9 million in April last year.
Mark Fleming, chief economist at CoreLogic, told reporters: "The shadow inventory has declined by nearly one-fifth since it peaked in early 2010, in large part due to a reduced flow of newly delinquent loans in recent months."
"However, it will probably take several years for the shadow inventory to be absorbed given the long timelines in processing and completing foreclosures."
The shadow inventory is like an axe above the head of the US housing market, having the capability to easily derail any signs of recovery, and with a track record to prove it.
The shadown inventory became an even bigger problem last year, when it emerged the several major banks had allowed improper practices into its foreclosure process and courts began proceedings. This led to banks slowing down on foreclosures swelling the inventory of distressed properties. Let us hope this apparent drop is not a drop in the ocean.