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housing market condition

Real Estate News

Laurie Goodman, from Amherst Securities presented her latest findings at the American Enterprise Institute and it is a gloomy forecast.  She describes, “10.81 million homes are at risk of default over the next 6 years. Even if we try to be extremely conservative we can’t get the number below 8.7 million units.”

With defaults already piling up, the shadow inventory of homes has been growing rapidly, and given this new data the number is going to skyrocket. As this chart shows, the total has gone up from 2 million homes in 2009 to 3.35 million as of April, a 67.5% increase already.

The Atlantic explains this shadow inventory chart: “What’s happening to the homes of all those defaulted borrowers that we hear about? Many of those properties are a part of so-called shadow inventory. This is the sort of limbo between when a home’s loan defaults and when the property is put on the market for purchase. The increase shown above is staggering. The shaded area shows mortgages more than 12 months delinquent or in foreclosure (darker blue) and those seized by the bank (lighter blue).” (more…)