Todd explains how the shadow inventory is shrinking in Las Vegas.
Hello. Welcome to Todd Miller TV. I want to talk about the shadow inventory today and the fact that the shadow inventory is actually shrinking. I read an article that was written by CoreLogic where they were analyzing all the numbers. Apparently, a couple of things were happening at the same time. (shadow inventory shrinking)
Inventory of course as you know is declining and prices are going up because of that. So as prices go up, that amount of homes that are upside down are starting to decrease. So the shadow inventory is fixing itself.
Last year they said the shadow inventory declined by 13 percent which is great. So I want to go over three numbers with you really quick.
First number is a million. That’s the number of houses that are behind their mortgage payments. There are a million people behind in the mortgage payments in the nation. Not Nevada or Las Vegas but in the nation.
Shadow inventory shrinking
There are 900,000 so almost a million that are in default, meaning the NODs in file. They’re somewhere in the foreclosure process. Now some of those will be short sold. Some will get results. Some will get loan moded. Some will get foreclosed. OK?
REOs, there’s 350,000. So when you look at those numbers (shadow inventory shrinking), there are more homes. REOs or NODs are ones that are coming and they said that that’s about a seven-month supply which would not be good of course if that all hit at once but we’ve been hearing for a couple of years that it’s going to flood. It’s going to flood and that number just keeps pushing back and as the number gets pushed back, shadow inventory increases.
So I’m declaring a shadow inventory irrelevant for the most part. If you’re in California, Arizona, Nevada and Florida, it will be a little more a possibility of something happening. But with these numbers, I mean a million homes nationwide is not totally terrible with prices going up and low inventory and high demand. We do need properties anyway and I think they’re going to flow out pretty slow. I don’t think they’re going to slam the market like they did in ’07 and ’08.
So I just wanted to share those numbers with you. I got that from CoreLogic. I thought it was very interesting (shadow inventory shrinking) because people talk about the shadow inventory and there are all these people out there. They sell your house now because next year it’s going to be worth less.
I just don’t know if anybody can really reliably predict that that’s really going to happen. So anyway, I thought I would share that with you. (shadow inventory shrinking) That’s my update for today and hope to see you on another video. Thanks.