Posted on Oct 15, 2012 in Roseville and Sacramento Short Sale FAQs

Hi, this is Mark Peek with Keller Williams Real Estate, and your short sale specialist. Today’s topic is shadow inventory. There has been lots of talk about shadow inventory, so what is it? Shadow inventory is basically properties that are in distress and folks who are not current on their payments and are delinquent on their mortgages. These homes have not yet hit the market. There have been estimates as to how many homes in the United States are in this state meaning that they are pre-foreclosure and they haven’t made their way to the market yet. The fear is that if this looming shadow inventory hit the market, it would actually depress prices even further. So what do those numbers look like, how have they changed? In July of 2011 there were 2.6 million homes deemed shadow inventory out there. Today as of July 2012, a year later, it has been reduced to 2.3 million.

So there are still a significant amount of homes that are considered shadow inventory that are still a risk to the market. So what has happened to those 300,000 homes over the last year and why are they not part of the shadow inventory anymore? Well, one of the things that has happened is we have done a lot of short sales and the short sales will take those properties out of default, transfer title and settles the debt so they are no longer in the shadow inventory figures. Also if folks have completed loan modifications are also no longer part of the shadow inventory because they would no longer be delinquent.

Why is this important because it still shows there is still significant risk out there for pricing and we still don’t know how it is all going to play out. Right now there is a definite push to workout solutions as far as short sales. So if you are one of those folks who may be part of the shadow inventory out there and you are in distress or in a position to where you are not going to be able to make your payments, give me a call. I would be happy to talk with you further. I would also like to recommend you use the short or stay calculator and then it will give you an idea of how long it will take for you to break even and for your home to become an asset again. Again, I’m Mark Peek with Keller Williams, one of Roseville and Sacramento’s leading short sale teams and we are here to help. Give us a call today.

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