I have been hearing about this "Shadow Inventory" for months. Experts have been saying that real estate prices will be going down some more this year because there are tons of foreclosed properties about to hit the market. Plus they also point out that many other potential sellers will be putting their homes on the market because they are tired of waiting for the market to get better. They've been saying this for so long, that it is beginning to sound like that old story about the boy who cried "wolf."
When I talk about the Shadow Inventory to some people on the North Shore, they give me a surprised look and say something like, "There aren't any foreclosures around here, I haven't seen any foreclosures signs."
Well I have to agree with part of that sentiment. I haven't seen any foreclosure signs either. You know why? Real estate companies don't typically put up a sign that says foreclosure when they are trying to sell a property. The only foreclosure signs I've seen are on the 10 pm news!
So, this morning I did some research to find out if there really is any "Shadow Inventory" on the North Shore. And, I also pulled some numbers that may surprise you - there have been many foreclosures on the North Shore in the past 12 months!! I looked at these North Shore towns: Deerfield, Evanston, Glencoe, Glenview, Highland Park, Kenilworth, Lake Forest, Northbrook, Northfield, Riverwoods, Skokie, Wilmette, and Winnetka.
In the 12 months ending today (1.26.11) there were 467 foreclosed properties sold by real estate agents in these North Shore towns. In that same period there were 377 short sales in the same 13 towns (source: MRED MLS).
There are currently 1,969 properties in these same North Shore towns that are in the foreclosure process (pre-foreclosure) or already bank-owned and not yet sold to new buyers (source: Realist public tax records). Not all 1,969 properties will end up in foreclosure or as short sales, but it is more than double the number of short sales and foreclosures that were sold in the past 12 months. This also does not take into account the "pent-up" potential inventory from sellers that have been waiting to sell their homes.
Click on this link to see town-by-town details in a cool 3-D chart, Download Shadow inventory 1.26.11. You'll see that Skokie, Evanston, Northbrook and Glenview head the list with the most Shadow Inventory. You'll also see that not a single town is exempt from this - yes even Kenilworth has some distressed properties.
If the banks start listing the Shadow Inventory for sale all at once, it will put more downward pressure on prices. I am hopeful that the banks will release the properties onto the market slowly to minimize the impact on prices. Only time will tell.
Thank you for reading!!
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I also hearing that the Real Estate experts saying that real estate prices will be going down some more this year. The Real Estate is a unpredictable business game.
Posted by: homes for sale omaha ne | March 09, 2011 at 07:31 AM