Does a looming Shadow Inventory exist? I believe that the foreclosures remain hidden in the background in the hopes that pricing remains as stable as possible. In a secondary market like ours it's easy to see the cycles which occur throughout the year. Although we experienced the turmoil of falling prices and now less inventory the seasonal fluctuations are relatively the same as always. Here is where the indicator of a shadow inventory begins to appear. By following the new listings entering the market place an annual trend can be shown here.
Above we see the full listing market with the number of units made available each month. It's pretty straightforward with no surprises indicated. The data below reflects the number of units and includes the median pricing. Our asking prices do reflect an air of positivity in regard to the Sellers but know that the Buyers are as staunch in their favor via the current sold statistics.
The chart below is where my concern over Shadow Inventory appears. The representative "Bank Properties" simply are not following the trend. They seem to be being doled out in a regular fashion so as not to upset any balance which may be present there. From a business standpoint they, the lenders, just haven't done their homework to understand the ebb and flow of how we move properties in South Florida. The boilerplate method they show is not helping the cause at all. Applying a wee bit of thought to local market activity, no matter where that may be could provide them many more sales in much less time and better sale prices.
The information above is provided through Clarus Market Metrics and can be compiled in moments. After seeing that Florida is ranked #1 in foreclosures now, by a fairly good margin too, this would be the perfect time for banks to sort out their inventory, do their homework, and rid themselves of non-performing real assets properly!
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