While sitting in karate class waiting for my kids to finish up their lesson, I pulled out my Blackberry hoping to catch up on some email and read today's news. I came across an interested article on dsnews.com regarding "shadow inventory properties". I found this to be especially interesting since it describes what could be another wave of foreclosures.
Standard and Poor's Rating Service defines shadow inventory properties as homes that are "90 or more days delinquent, in foreclosure, or REO, but haven't hit the market". The article goes on to state that if this shadow inventory of homes hits the market all at once, it could drive down home values as supply increases.
Obviously every market is different in terms of the amount of delinquent and distressed properties there are in the market. My office is in the Horsham Township of Montgomery County PA, and we have not seen in this area the amount of foreclosures that other areas have seen.
We need to see a rise in the demand of homes to keep up with the supply. If the shadow inventory of homes hit the market all at once, we could see another decline in home values in some of the already struggling areas of the country.
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