Courtest of the Boom-Bust blog is this revealing graphic, below:
As you can see, the most recent update to the graph was the August 2010 data, but the trend is evident...
The graph shows the number of years needed to clear just the 'shadow inventory', indicated at three different levels:
- A shadow inventory at 20% of sales
- A shadow inventory at 25% of sales
- And a shadow inventory at 30% of sales
Shadow inventory can be simply stated as: properties that are either already owned by the banks and have not been put on the market, properties that are in the process of foreclosure and will be owned by the banks at some date in the near future, or homes that owners desire to sell but are delaying putting on the market until prices improve.
The figures for the shadow inventory range from 1 million to over 7 million homes, depending upon the particular slant of who is estimating the data.
What is really most important to the majority of my blog readers is the shadow inventory here in Palm Beach County. And I have to believe that it is substantial.
Just in the 33463 and 33467 zip codes there are currently 1679 properties either already bank owned or scheduled for sale at auction....a very small % of which have made their way back on to the market...the rest are then: shadow inventory
The above number doesn't even consider the thousands of homes that already have a lis pendens filed by the lender for mortgage default.
The graph above displays 'national' estimates...with a 30% shadow inventory, it would taake over 7 years to clear the backlog at the current rate of sales! That would indicate a market bottom somewhere around 2018...With only a 20% shadow inventory, we're still looking at 2016.
Just to put things in perspective...as of today, there are 484 properties on the market in the 33463 zip...but there are 1010 bank owned or scheduled for auction...95% which are NOT on the market yet.
In 33467, there are 659 properties on the market and 569 currently in bank inventory or scheduled for auction.
If you'd like to discuss how to use this information to your benefit, just call me on my direct line: 561-602-1258.
An associated post from one of my other blogs also talks about the 'shadow inventory'
Thanks for reading!
