Not Yet on the Market
There has been a lot of talk lately about "shadow inventory" in the financial community. This is the term applied to the current supply of homes held by banks and other lending institutions where the homeowners are behind on their mortgages, or that have been foreclosed on, but are not yet on the market. There are a lot of fears surrounding "shadow inventories" and the perceived potential for a "flood" of foreclosure inventory being brought to market, creating a dampening effect on the housing recovery.
I found three articles which debate the point, but I must admit I'm more personally aligned with this one by Larry Nusbaum, a resolution assistance contractor for the FDIC. More pessimistic views can be found in these two articles found in the Wall Street Journal and iStockAnalyst.com. Admittedly, my optimism may have a lot to do with where I live.
"The problem is largely concentrated in Arizona, California, Florida and Nevada", WSJ.com
If you are in one of these states, the shadow inventory threat would certainly seem far more credible than for other major markets around the country. In Texas, for instance, we are seeing inexpensive inventory snapped up in a matter of days by investors. I even saw one last week where the investor buyer wrote a full price offer for a property that had only been on the market two hours, and delivered his offer with a 100% earnest money check. He got the property, but it turns out there were eight other offers written and delivered to the selling agent within a 24 hour period from the time it went on the market.
What does that mean to me, today?
If you currently have your home for sale, you still need to be aggressive in getting it sold. While we are seeing improvements in most price ranges over the first two months of 2010, there is still a surplus of inventory, and a smaller pool of buyers due to increased lending restrictions and continued unemployment. Bearing all that in mind, my goal is to be the next home that sells in my subdivision.