Overall, 1.7 million homes were counted among the shadow inventory in April, down from 1.9 million in the same month last year, according to new statistics from the real estate tracking firm CoreLogic. That level accounts for a five-month supply of homes as they sell at the current rate.
“The shadow inventory has declined by nearly one-fifth since it peaked in early 2010, in large part due to a reduced flow of newly delinquent loans in recent months,” said Mark Fleming, chief economist for CoreLogic. “However, it will probably take several years for the shadow inventory to be absorbed given the long timelines in processing and completing foreclosures.”
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The shadow inventory reached its all-time high in January 2010 at 2 million units, but has declined 18 percent since then, the report said. In addition, the combination of both shadow and visible inventory dropped to 5.7 million in April, down from 6.2 million in the same month last year.
Typically, homes that are in foreclosure sell for far less than comparable properties on the normal market, because banks are eager to sell in an attempt to begin making money on them again.
[Related Article: Huge Backlogs Still Delaying Foreclosure Actions]