What is Shadow Inventory?

By
Real Estate Broker Owner with Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate B.1000860.LLC

What Exactly is Shadow Inventory in the Las Vegas Real Estate Market?Las Vegas Shadow Inventory

Shadow Inventory has been a HUGE boogeyman in the Las Vegas Real Estate Market.  Experts wring their hands and have been telling us for YEARS how we are just going to get a bunch of Las Vegas REOhomes for sale just dumped on us overnight.

I actually feel bad for those that parrot what they hear on the news and pretend that they know what they are talking about.  Some people’s perception of REO shadow inventory is that banks just sit there and hold on to properties that have already been through the foreclosure process.  This could be further from the truth.  Banks (or servicers to lienholders/investors) DO NOT want to hold on to inventory or assets longer than they have to.

They want to get this stuff off their books & quickly!

There are many things that hold up the process to get them listed by a real estate agent on the free market such as bankruptcy, tenants, unwilling occupants, trash outs and even property rehab.  Once those items are taken care of, the home is listed or sold to investors in bulk packages.

Another way shadow inventory is presented is how many homes are in default or at risk of default.  Unfortunately this is not a good indicator for “the big dump” because many real estate market forces will absorb that inventory:  the homeowner could accept a loan modification, the homeowner could short sale the home successfully or an investor could purchase the home at the trustee sale or foreclosure auction and either rehab and resell or rehab and rent out for a long term hold.

Las Vegas Foreclosures will be around for awhile – I am not doubting that.  The only thing I doubt is that the shadow inventory fairy dumps an abundance of inventory on us one day.  I have been hearing about this for two years, I am sure I will be hearing about it for the next two years.  The only way we will see an abundance of inventory GROW is if all the Las Vegas Buyers decided to leave the building all at once.  Doubtful – but I have been wrong before.

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Thanks,  Renée Burrows 702-580-1783 Broker/Owner, REALTOR®
 

 

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Re-Bloggged 5 times:

Re-Blogged By Re-Blogged At
  1. Gene Riemenschneider 01/22/2011 09:01 PM
  2. Jim McCormack 01/24/2011 12:28 PM
  3. Capt. Bob Davies 01/24/2011 01:38 PM
  4. Dave Woodland 01/25/2011 12:24 AM
  5. Kate Reilly Lund 01/26/2011 01:53 PM
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Topic:
Real Estate Market Trends
Location:
Nevada Clark County Las Vegas Jake's Ranch
Groups:
BPO agents
Las Vegas Foreclosures - Homes, High-Rises-Condos
Nevada/Las Vegas REO, Fourclosure, Short Sale Specialist
REO
Short Sales Pre Foreclosures Bankruptcy and More!
Tags:
las vegas nv real estate
las vegas foreclosures
las vegas short sales
las vegas reo
las vegas homes for sale

Comments 76 New Comment

Ambassador
2,272,547
Patricia Kennedy
For Your Home in the Capital
Evers & Company Real Estate, Inc.

Renee, reading this post and the many comments is a wonderful education for all of us. 

January 25, 2011 09:16 PM
Rainer
33,182
Kate Reilly Lund
RE/MAX Diamond, Realtors

Good information. I am going to Reblog this because we are very down on the banks in NJ. We can't seem to get any action from them no matter what favorability there is.

Katie the Real Estate Lady

Kate Reilly Lund

http:www/kreillylund.remax-nj.com

January 26, 2011 01:50 PM
Rainer
33,182
Kate Reilly Lund
RE/MAX Diamond, Realtors

Good information. I am going to Reblog this because we are very down on the banks in NJ. We can't seem to get any action from them no matter what favorability there is.

Katie the Real Estate Lady

Kate Reilly Lund

http:www/kreillylund.remax-nj.com

January 26, 2011 01:50 PM
Rainmaker
192,165
Sandy McAlpine
Search Lake Norman Homes For Sale - Lake Norman NC
McAlpine Properties

I don't believe that banks are holding inventory, but I do believe in hundreds of thousands of homeowners are currently in 90 day default and that is scary!!

January 26, 2011 03:47 PM
Rainer
155,998
David Evans
HUD NLB Cumming GA
RE/MAX TOWN AND COUNTRY

BANKS hold inventory because they still get their guaranteed payoff at the end and YES they are working it!

March 01, 2011 10:33 AM
Ambassador
1,449,341

Renée Burrows

Las Vegas Real Estate Broker - www.urLVhome.com
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