Statistical Indicators

Shadow Inventory

Posted on Tuesday, March 16, 2010

Estimates of shadow inventory have ranged anywhere between 1.7 million properties to 7 million. The reason for this wide range of estimates stems largely from varying perceptions of what exactly shadow inventory means. Those whose definition of shadow inventory refers to seriously delinquent loans (90 or more days late) and properties in the process of foreclosure but excluding distressed properties already listed on the market and loans in the mortgage modification process, arrive at more modest estimates. In contrast, those looking at every loan that has recorded at least one missed payment, do not account for properties already listed or those being modified, and do not assume that some of the loans currently delinquent will cure, naturally arrive at much larger estimates of the shadow inventory. MBA and NAR say current shadow inventory is estimated at around 2.49 million units.

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