ORLANDO, Fla. – Sept. 26, 2012 – Two reports – one that covers Florida and another focused on the U.S. – find that shadow inventory continues to decline.
Shadow inventory – homes not yet in the for-sale inventory but at some stage of foreclosure with a likely chance to enter the market – has been a threat to the real estate recovery for a number of years. Many experts feared that home prices would stagnate if buyers continued to avoid the market or had trouble qualifying for a mortgage as a rising number of distressed homes entered the market.
“That problem seems less of a threat as time passes,” says Florida Realtors Chief Economist John Tuccillo. In an updated report issued by Florida Realtors Industry Data and Analysis (IDA), Tuccillo finds that the state’s shadow inventory continues to decline.
“Lenders show an increasing willingness to encourage short sales, so they don’t have to submit properties to the foreclosure process,” Tuccillo says. “In Florida, a foreclosure must go through a lengthy – and expensive – judicial process. While waiting for a final ruling, it costs lenders money to hold and maintain property.”
Tuccillo expects the shadow inventory to continue its decline. IDA’s complete report is available on Florida Realtors’ website. Click the “residential” box under “Research reports.”
Nationally, JPMorgan Chase released a report saying the U.S. shadow inventory declined by 1.2 million in the first half of 2012. Chase expects the trend to continue and suggests that the same number will exit shadow inventory before the end of the year, taking the complete national shadow inventory down to about 4 million – a reduction of one-third compared to the 6 million in 2010.
To calculate shadow inventory, Chase considered all homes at least 60 days late in a mortgage payment.
“Although re-defaults and new delinquencies will continue to keep shadow inventory elevated, the rapid decline should prevent downward pressure on home prices going into 2013,” Chase analysts say. “Combined with better existing home sales, investors have reason to be optimistic about running recovery scenarios.”
© 2012 Florida Realtors®
Shadow inventory – homes not yet in the for-sale inventory but at some stage of foreclosure with a likely chance to enter the market – has been a threat to the real estate recovery for a number of years. Many experts feared that home prices would stagnate if buyers continued to avoid the market or had trouble qualifying for a mortgage as a rising number of distressed homes entered the market.
“That problem seems less of a threat as time passes,” says Florida Realtors Chief Economist John Tuccillo. In an updated report issued by Florida Realtors Industry Data and Analysis (IDA), Tuccillo finds that the state’s shadow inventory continues to decline.
“Lenders show an increasing willingness to encourage short sales, so they don’t have to submit properties to the foreclosure process,” Tuccillo says. “In Florida, a foreclosure must go through a lengthy – and expensive – judicial process. While waiting for a final ruling, it costs lenders money to hold and maintain property.”
Tuccillo expects the shadow inventory to continue its decline. IDA’s complete report is available on Florida Realtors’ website. Click the “residential” box under “Research reports.”
Nationally, JPMorgan Chase released a report saying the U.S. shadow inventory declined by 1.2 million in the first half of 2012. Chase expects the trend to continue and suggests that the same number will exit shadow inventory before the end of the year, taking the complete national shadow inventory down to about 4 million – a reduction of one-third compared to the 6 million in 2010.
To calculate shadow inventory, Chase considered all homes at least 60 days late in a mortgage payment.
“Although re-defaults and new delinquencies will continue to keep shadow inventory elevated, the rapid decline should prevent downward pressure on home prices going into 2013,” Chase analysts say. “Combined with better existing home sales, investors have reason to be optimistic about running recovery scenarios.”
© 2012 Florida Realtors®
Posted by www.miamiforussian.com
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