On January 26, 2011 I wrote an article about the “shadow inventory” on Chicago’s North Shore. Shadow Inventory, in the world of residential real estate, is an estimate of the distressed properties (foreclosures and short sales) expected to come on the market in the coming months. There are plenty of market gurus talking about Shadow Inventory on a national or state level, but I thought it would be most helpful to see what these numbers look like in our individual communities on the North Shore. I also looked at recent sales of distressed properties in these same communities.
Now, 6 months later, I can compare the numbers we saw in January, to the inventory levels today. This information is critical to understanding the local markets. The presence of distressed properties in a market causes downward pressure on prices for all properties. I can’t stress this enough. And this is definitely a local phenomenon. So while you may hear some sound bite on the news about prices starting to rebound in Florida or Las Vegas, you can’t assume that the same thing is going on here. In many parts of Florida and Las Vegas these properties have already made their way through the market and are not a factor anymore.
I will be posting about each suburb over the next few days. Taking a bit of time to go through all of the data I pulled.
So, for starters, I will share my first chart: Download Shadow inventory chart 7.26.2011 This chart shows the number of bank-owned and pre-foreclosure properties as of 7.26.2011 versus 1.26.2011.
Stay tuned for market info for each suburb over the next few days.
Thank you for reading.
nsk
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