Roughly 100,000 Homes As Part Of Shadow Inventory In Los Angeles County:
At least that's what the analysis is of whoever runs the Dr. Housing Bubble Blog.
The numbers they lay out are quite compelling. Pretty scary in fact. All the evidence points to a larger inventory of homes for sale, at some point in the near future. But when exactly? No one really knows. It depends on how quickly these banks can get to actually foreclosing on homeowners who are already in default. No one really knows why it's taking them so long to do so, but one could speculate a number of theories. I won't do that here.
Currently in the Santa Clarita real estate market, there is an abnormally low inventory of homes for sale. We could definitely use more homes for sale, in order to meet the demand of all the buyers that are out there. But is there enough buyers out there, for this shadow inventory of homes that have yet to be foreclosed on, or yet to reach the market? I don't think there is, if it hit all at once. But, it won't likely all hit at once – the banks aren't that coordinated or efficient. So that leaves me questioning how bad any shadow inventory may be. If rates stay low, home values stay where they are, job losses stagnate or if we even see job growth, and a stock market that starts gaining…people may start to become optimistic and start buying homes in even greater numbers than they are now (despite this looming fear of a shadow inventory).
Whatever happens, I just hope it's for the best. I want buyers to get good deals, and homeowners to stop losing so much money. A utopia, I know. The good thing is this….if this shadow inventory story comes to fruition, we should start seeing early signs of it before the momentum starts to build in the supposed inventory number increase, months and months in advance. How will that help you? I don't know. Perhaps you will hold off your home purchase several more months…if you knew more inventory and options were on the way?
As always, we'll do our best to give you our local perspective, here at the SCREF. In the meantime, go check out this blog post over at Dr Housing Bubble Blog.