The Disappearing "Shadow Inventory" and What it Means for Homebuyers

The housing market has been on quite the roller coaster ride the last decade. And while things are looking up after a few tough years, one issue that has surfaced is that of inventory—specifically shadow inventory. Shadow inventory, or properties in foreclosure or in serious delinquency status, has been steadily declining in recent years. According to the National Association of REALTORS®, distressed sales made up 10 percent of existing-home sales in March, down 4 percent from March 2014. While it’s obviously a great thing to see fewer distressed homes, it does mean an even tougher inventory situation for prospective homebuyers, especially in certain areas where home inventories are especially low. Paired with rising home values, lower shadow inventory means it could take longer to find the right home at the right price.

Story Springboard

Review NAR’s infographic on the dwindling shadow inventory and the effect it is having on the housing industry. Additionally, find a REALTOR® in your area that can speak to your community’s own inventory levels and see if the nationwide shadow inventory situation translates locally. Talk to potential homebuyers in your area to see if they are having difficulty finding homes for sale and what they might be doing to combat those issues.

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