What is the Shadow Inventory in Columbus Ohio Real Estate?

By
Real Estate Agent with Mickey DiPiero - e-Merge Real Estate - Columbus, Ohio
http://actvra.in/4vK

What is the Shadow Inventory in Columbus Ohio?Shadow Inventory Home Columbus Ohio

We've all seen the houses in our communities that have been foreclosed upon but not put up for sale.  These homes in Pickerington Oh, Reynoldsburg OH and Canal Winchester OH and every other Central Ohio community are the most visible evidence of the shadow inventory of homes that will continue to glut the real estate market and threaten to stall a recovery.  Shadow inventory is the number of homes that are expected to be foreclosed on or have already been foreclosed but have not yet been put up for sale.  Shadow inventory numbers include homes that

  • Are 90 days delinquent on their mortgage but may not be in foreclosure proceeding
  • Are in foreclosure proceedings
  •  Have been foreclosed but have not been listed for sale yet

The shadow inventory is growing

Many factors have contributed to the growth of the shadow inventory.  One is that the banks are taking longer to complete the foreclosure process.  The lawsuits filed by home owners who were wrongly foreclosed upon and the scandal from the robo-signing of foreclosure documents led banks, namely Bank of America, Chase, and Ally to call a temporary moratorium on foreclosure filings last year.  The scandal has forced banks to be more careful and deliberate in their paperwork.  As this foreclosure process has slowed, the number of shadow inventory homes has grown.

Short sales also contribute to the shadow inventory numbers.  Home owners who are selling their homes short are included in the shadow inventory as they are often 90 days in default and may also be in foreclosure proceedings.  The good news is that these short sales are more likely not to become a part of the future shadow inventory. 

Shadow Inventory Home Gahanna OhioInventory is also growing as more home owners are striving to modify their existing mortgages.  While loan modification has not been a great success, banks do seem to be working harder to make them work.  In 2008 80%-85% of modified loans re-defaulted.  By the third quarter of 2009 only 50%-55% of modifications were failing according to S&P.  In September 2010, CNN reported that 22% of loan modifications defaulted.  These modifications are a good thing as they keep people in their homes and keep further inventory off the market.  Unfortunately, they have not happened often enough and have not been successful enough to have had a true impact on the foreclosure crisis.  They still contribute to the numbers because the process is slow, not all loans will be deemed eligible for modification, and not all are successfully modified.

Lastly, for years now the banks have been holding back some of their foreclosures from the Columbus Ohio real estate market.  They have been doing this so as to not flood the market with inventory and further depress home values.  This has been good because real estate values did not need the added pressure.  This is also a self serving strategy for the banks as the homes they list are also getting a higher value.  This will continue as the mortgage bankers association suggested that there are more than 2 million Americans seriously delinquent on their homes as of last fall.Sold by Mickey DiPiero

This inventory will take years to flush out of the real estate market and adds further uncertainty as foreclosed homes that are being held back are not being effectively tracked in communities.  If you would like a market analysis of your home or community, please contact us for a customized report. 

Posted by

Mickey and Lisa DiPiero Real Living HER

Email:  Mickey.DiPiero@gmail.com On the web at: WWW.HomeFactGuide.com

 

 

Mickey DiPiero and Lisa DiPiero are experienced full service REALTORS® at e-Merge Real Estate. Our clients recognize us as committed, knowledgeable, and caring professionals. As a result, we have built a successful, referral based business that continues to grow in tough times. Our clients know that when put your homes for sale with Mickey and Lisa you get twice the commitment, twice the effort, and twice the advantage. Contact us at 614-804-5600.

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