For the past couple of years, we've been hearing the term shadow inventory, and how it could possibly threaten our already slow housing recovery.  Shadow inventory is a term given to homes that are more than 90 days behind on their mortgage payments, homes that are currently in foreclosure, as well as houses already back in the banks hands.  These homes are taken back by the banks, and held off of the market so that the market is not flooded with foreclosures, which will ultimately diminish options for traditional sellers and buyers who are planning to move. 

According to a recent report issued by Standard & Poors, the foreclosure rate in Portland, Oregon was up to 47% between September of 2009 and December of 2010, with 45 months of this inventory entering the market over the next few years.  This is not great news for traditional sellers who are in direct competition with these distressed property prices, as they will be forced to price their homes low enough to attract buyers to make an offer. 

This so called "shadow inventory" could possible depress home values further, delaying the housing recovery for longer than anyone has anticipated.  However, there are some bright spots according to an S&P Annual Report, stating that the volume of mortgages that are either delinquent, or in foreclosure and have yet to hit the market, continues to fall, although at a progressively slower rate. 

So how does one stay ahead of the curve when it comes to selling a house in today's real estate environment?  In today's market you have to be the in the best condition at the lowest price, to win this price war.  If you are considering selling your home, I would recommend to act fast, as we do expect to see more distressed properties, as well as traditional sales coming on the market in the spring time.  That means more supply for less demand, giving buyers more of an upper hand in the negotiations of price and terms.  My advice to you would be to contact a local REALTOR to help you determine what the best strategy is to get your home sold.