MarketWatch: Housing isn’t close to stabilizing

[marmar]

By Keith Jurow, a Minyanville.com contributor


BRIDGEPORT, Conn. (MarketWatch) — Much has been written about the so-called “shadow inventory” since the term was first coined a few years ago.

Some analysts and commentators have argued about whether it even exists. Let’s take an in-depth look at this shadow inventory and see whether it really is a threat to housing markets around the country.

Rather than joining the dispute about what the term actually means, I’ll simply define it in this way: The “Shadow Inventory” is comprised of all those distressed residential properties (other than MLS listings) which we know will almost certainly be coming onto the market in the not-too-distant future.

MLS foreclosures — the tip of the iceberg

The starting point in discussing the shadow inventory has to be homes actually on MLS listings around the country. With the plunge in home sales starting in July, the number of listings has risen substantially since the spring. For example, California listings are up 25% since April.

The percentage of total listings that are bank-owned properties has declined over the last year, while the percentage of short-sale listings has risen tremendously during the same period. For example, short sales comprised 40% of all active listings in Sacramento County in August. The following table from data supplied by ZipRealty shows this soaring number of short-sale listings. ...........(more)

The complete piece is at: http://www.marketwatch.com/story/housing-isnt-even-close-to-stabilizing-2010-09-22

[ixion]

1. The author's definition of "shadow inventory" is lacking, at best

and contains no reference to the Banksters who created it and who are using it to keep houses over-valued.

[customerserviceguy]

2. Hyper-low interest rates

are allowing the bankers to keep the shadow inventory off the market. When they actually have to start paying some interest to depositors, then they'll unload the inventory.

Trying to do CPR on the housing market is just prolonging the recession. We won't see the economy pick up until after house prices have hit rock bottom.