Where Is All The Shadow Inventory? In Fact Where's All The Inventory?

By
Real Estate Broker/Owner with CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments 521400, 1501015, 01795582

            Where Is All The Shadow Inventory?

In Fact Where's All The Inventory?

 

I've been hearing the drums beating in the distant from many RE Professionals and Stakeholders and from my own experience have even seen a lack of inventory  in our neck of the woods. I've also been hearing that a good amount of our so called "Shadow Inventory" was gobbled up by some big Wall Street hedge funds.

 

Where's the Inventory

 

 

If so is this the reason for the sudden lack of inventory in the mainstream? Where will our next source of inventory come from? Are they building enough new homes today to keep up with demand? Or is the demand really there at all? Where do you think Real Estate is heading in 2015?

 

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Comments (10)

Susan Jacobsen
The Alliance Group Realty - Hilton Head Island, SC
20 Years Providing WOW Real Estate Service

John - yep that inventory has absolutely disappeared and it is indeed a mystery where all those homes that were foreclosed on through the Master in Equity and were 'taken back' by the lenders have gone. In our market, we've seen them gradually come back on the market but unlike 2 years ago, the lenders are painting and recarpeting and getting really good prices.

Jan 27, 2015 10:39 AM
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

John, our inventory has been at low levels for months but there seem to be still plenty of homes out there that have lockboxes or notices hanging on the doors and in windows without being listed.  Lenders seem to be holding back on bringing them to market.

Jan 27, 2015 10:40 AM
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

The "shadow inventory" didn't seem to materialize as we were concerned about.  I think the lenders may have rented out a great many of them.  Also, there were reports that some lenders bulked a bunch of them together and sold to the highest bidder.

Jan 27, 2015 10:56 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi John --- while there has been a slight increase in the number of homes for sale in parts of our market -- overall it still favors sellers --- and in the extreme sense.

Much of California has been said to be housing-deficient based on our current and projected population.   Something has to give.  But what?   This trend has been going on for quite some time.

Jan 27, 2015 10:57 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Susan Jacobsen Yep, you're spot on about things still moving. I'm just a little concerned about being able to continue seeing the things we move.

Jan 27, 2015 11:14 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Silvia Dukes PA, REALTOR Hmmm...............that hits a new note. I wonder what distant drums lenders are hearing.

Jan 27, 2015 11:15 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Myrl Jeffcoat That's exactly what happened in many instances. I know for a fact because my neighbor is one of those hedgefunders. They bought up almost 500m of foreclosures and put them into one gigantic rental portfolio called a REIT with the proviso mandated by the lenders that they don't sell off for at least 5 years. The clock is ticking. Wonder if we'll start seeing some releases.

Jan 27, 2015 11:19 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Michael Jacobs I have to chime in with that opinion whole heartedly. California's such a mixed bag of variables and so volitile that it's scary in many ways. Not so much for the buy and holders but more so for the Turn and burners which is what we do. Timing and positioning is everything.

Jan 27, 2015 11:22 AM
Winston Heverly
Winston Realty, Inc. - Atlantis, FL
GRI, ABR, SFR, CDPE, CIAS, PA

John,  a nice refreshing read that gives the heart of real estate a specific purpose.

Jan 27, 2015 01:05 PM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

John, The hedge funds need very high ROI to justify themselves to their investors. So yes. they will eventually sell all of these houses.

The REITS that have set up will continue to rent these houses as long as they can, so these houses won't be coming back on the market.

I guess you would call this a "mixed bag."

But the real problem for us in California is the high cost of new construction ( read that the high cost of entitlements).

And the economy is very soft. It isn't going to improve any time soon, no matter what they say on the media.

We have the lowest percentage of home ownership in over 30 years. This is a trend that is going top continue downward.

Bill Roberts

Jan 27, 2015 11:38 PM