The prior Martenson report on housing covered inventory (supply) and prices. Lots of news has recently come out that I want to add to the story. The breaking news in this area is coming a furious pace these days.
This first is an estimate of shadow inventory, and it’s something of a shocker. Where I had suspected that inventory was being understated “by a few million,” I did not think that it was as high as 7 million.
Housing Crash to Resume on 7 Million Foreclosures, Amherst Says
Sept. 23 (Bloomberg) — The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.
The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said.
Helping to stoke speculation the housing slump has ended, an S&P/Case-Shiller index for 20 U.S. metropolitan areas showed the first month-over-month increases in values since 2006 in May and June, reducing the drop from the peak to 31 percent. Echoing other mortgage-bond analysts including those at Barclays Capital Inc., Amherst cautioned that a change in the mix of foreclosure and traditional sales over different parts of the year lifted prices in the period, as the distressed share shrank.
by davos