Shadow inventory fell nationwide in January from 2 million units a year ago to 1.8 million units, according to CoreLogic data released this morning.
And while loan modifications and short sales could possibly cut the supply in half, chances are it won’t. The current inventory represents a nine-month supply. In Michigan, there is a 16.3-month supply, which is up from a 15.6-month supply in January 2010, according to CoreLogic.
Shadow inventory is the pending supply of distressed properties such as bank repossessions, those in some stage of foreclosure and those that are 90 days or more delinquent on mortgage payments.
The release of these properties on the sales market could further depress housing prices, which have been falling for six consecutive months after home buyer tax credits were removed from the mix last year.
CoreLogic said that of the 1.8 million properties it defines as shadow inventory, 870,000 are seriously delinquent, 445,000 are in some stage of foreclosure and 470,000 were repossessed by the bank.
While the Santa Ana, Calif.-based company did not release a state-by-state breakdown, it indicated that Illinois, New Jersey and Maryland had the highest levels of distressed property supply. Those states with the lowest levels were North Dakota, Alaska and Wyoming.
By Greta Guest, Detroit Free Press