What about all of the FNMA 2055 Exterior Only Pre-Foreclosure Appraisals some of you are performing from time-to-time....maybe since 2008? When these do go to foreclosure, as much as 70% of these will never make it into the MLS. So, how do you quantify them? How do you report on them within your reports? To add to your analysis, Have you compared the number of homes currently for sale as compared to the number of homes sold in your market YTD? Here are my local numbers from Realtor/Broker, Tony Zito: Active 12/2/09-3623 Pending 12/2/09-850 this is down 17% from last month and I have not seen this number that low since I have been tracking the numbers for almost 2 years. Sold: November 09-508 November 08-380 November 07-604 November 06-691 November 05-806 November 04-652 One method I use in my 1004MC is to add this statement: "SMART MLS Analysis showed only X REO sales out of X total comparable sales since 1/1/2007, or X% of Total Competing Submarket Sales, which (does or doesn't ) appear to be an indication REOs are negatively impacting this market. It's also stated here that a recent Active Rain article (The Landmines Within by Michael Tarabotto http://activerain.com/blogsview/930436/the-landmines-within ) stated that as much as 70% of REOs never make it into the MLS - Meaning that it might be impossible to know or state the exact # of competing REOs if they're not being listed. MLS is reporting X comparable REO listings." Shadow Inventory. I don't have time in this short tip to get into the technical definition of shadow inventory. When I refer to shadow inventory, I'm referring to Pre-Foreclosures and Short Sales not listed in MLS (not easily quantifiable) and the excessive number of homes currently for sale, higher than the actual number of homes that have historically sold in a market in a given year. On 9/30/2009, Henry Blodget wrote: "Massive "Shadow Inventory" Overhang Will Keep Pressure On House Prices" with those below showing just how enormous the problem.