Yesterday, I received a great comment by a Destin, FL REALTOR® who pointed out that the shadow inventory of homes has many more components than just the defaulted mortgage pool. His example was of homes in a new neighborhood, developed in 2005, where all of the home owners are now upside-down on their mortgages.
As he explained in his comment on the Tallahassee real estate blog, Jim noted
Until that whole neighborhood turns over, it is going to have downward pricing pressure. We are talking about hundred of homes within a small radius.
So what this means, in a nutshell, is many homeowners in these types of neighborhoods become part of the growing shadow inventory because even though they might want to move, they are not in a position to sell their home.
Another Example Of The Shadow Inventory In Real Estate
I was doing some research on the Southwood neighborhood (after reading a poorly researched article) and found that there are 69 homes for sale in Southwood, just in the Tallahassee Board of REALTORS® Multiple Listing System. That doesn’t include any un-listed builder homes or “For Sale By Owners.”
As I was going through the data, I decided to look at all the homes that had been sold in the past as well, and I came across one that was on the market since December of 2005. It recently sold this year by a different real estate company for 28% less than its original list price! The reason that it caught my attention is because it showed a “time on the market” of just 1 day! How could this be …?
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[click here to discover the 2nd largest source of homes in the Shadow Inventory]
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