The real estate market has been hindered by shadow inventory since its collapse five years ago, but CoreLogic reported that the supply dropped in July.
The firm’s Shadow Inventory Report showed a six-month supply of 2.3 million units in July, a 10.2 percent decrease from a year ago when it was 2.6 million units. Of the 2.3 million units, 1 million are seriously delinquent, 900,000 are in a stage of foreclosure and 345,000 are real estate-owned.
“Broadly speaking, the shadow inventory continued to shrink in July,” said Anand Nallathambi, president and CEO of CoreLogic. “The reduction is being driven by a variety of resolution approaches. This is yet another hopeful sign that the housing market is slowly healing.”
Shadow inventory is believed to put downward pressure on home prices if it hits the market all at once, but experts don’t believe that will happen, according to the Orange County Register.
Michelle Lenahan of ForeclosureRadar told the newspaper that she doesn’t believe the shadow inventory will be dumped on the market in a single wave, but rather bit by bit.