Don't tell me anything about shadow inventory: Who new about shadow buyers?

Real Estate Agent with Maui Life Homes / Metro Life Homes RS-78439 / BRE #01708344

Don't tell me anything about shadow inventory:  Who new about shadow buyers?

For years, we've been hearing about "shadow inventory", or this mysterious stockpile of bank-owned properties that at some point would be released into the market like some biblical plague.

I'm not buying it.  (No pun intended)

The new buzz phrase I'm officially coining is "shadow buyers".

Who had any idea that such an unknown growing swell of buyers was looming in the darkness until now?

And this pool of buyers is a combination of first-time buyers, buyers looking to upgrade, and investors.

The amount of activity and home value gains being witnessed in some part of the countries is record-breaking. 

And this is not hypothetical, like the shadow inventory "theory".  I see it myself from both my listings and also buyers that I am working with.

And one important thing to keep in mind:  Any movement in the residential real estate market doesn't come over night.

What I mean by this is - once there is momentum in any direction, a change in that direction doesn't happen instantly.  Just as we saw it took years for the perception in the real estate market to change from a downward spiral to an upward direction, it is the same for both sides.  Now that it is perceived that we are in an upward market, you're not going to see any change with that any time soon.

But the point is, I don't believe anyone knew about the number of potential buyers that would be appearing once the official "up" whistle was blown.



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Jean Hanley
Coldwell Banker Kivett Teeters - Hemet, CA
Specializing in Folks Who Want To Buy/Sell Homes

Ralph, I think you may be on to something  We are most definitely seeing a huge influx of buyers coming out of the woodwork.

Mar 07, 2013 04:12 AM #1
Michael Blue
Home Smart Realty West - Encinitas, CA
REALTOR - 760-889-8877, Encinitas/Carlsbad
I like your analogy of the shadow buyers but the Market can go down quicker than it will go up as evidenced with Ben Bernanke, he got on TV in 2007 and initially said our financial structure was failing, what a downward in we went into...and the fear in Americans was real. Remember all those TV newscast showing people living in tents and trailers, Unemployment skyrocketed at least that's what it seem like, alot of my friends lost their jobs and it really took a long time to get us going back up.
Mar 07, 2013 04:29 AM #2
Linda K. Mayer
License # 01767321 - La Verne, CA

They buyers are indeed coming out of the woodwork.  But good ole Uncle Sam has paved the way and is in the process of allowing quantity purchases to foreign investors... this keeps our inventory low and prices up.  Makes the administration look really good.  However when they are selling 500 lots of homes to Chinese investors and German investors, it's not going to help our local buyers at all!  Those foreign investors  are your shadow buyers!

Mar 07, 2013 07:35 AM #3
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Except for two really unique properties, our office cannot even have a property for more than a day or so before it goes pending.

Mar 07, 2013 11:06 AM #4
Christine McDaniel
Coldwell Banker Residential Brokerage Porter Co. - Crown Point, IN
Broker Associate

Robert, I agree we've seen this coming since the fall.  It was turning ever so slightly.  I wonder if the changes to FHA on April 1st will affect anything.

Mar 07, 2013 02:52 PM #5
Diane McDermott
Realtor®, GRI, Landis e2 Real Estate, LLC - Charlotte, NC
Charlotte NC Real Estate Market

I like your new term Ralph! We're definitely seeing a LOT of movement and activity around here

Mar 08, 2013 12:32 AM #6
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Ralph Gorgoglione

Hawaii and California Real Estate (800) 591-6121
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