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Troubled homes hanging over U.S. inventory decline

Call it a sliver of a silver lining for America’s beaten-down housing market: The inventory of troubled U.S. homes not yet listed for sale is diminishing.

Homes in foreclosure or headed into foreclosure are being sold at a fast-enough clip to chip away at the so-called shadow inventory that hangs over the U.S. market, Santa Ana data provider CoreLogic reported Tuesday. Shadow inventory at the end of July was down to 1.6 million units, representing a five-month supply of homes.

That means there are 1.6 million homes in the pipeline not listed for sale. This is down from 1.9 million units, a six-month supply, from about a year ago.

“The steady improvement in the shadow inventory is a positive development for the housing market,” CoreLogic Chief Economist Mark Gleming said. “However, continued price declines, high levels of negative equity and a sluggish labor market will keep the shadow supply elevated for an extended period of time.”

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The company derives the estimate for shadow supply, or pending supply, by determining the number of so-called distressed properties not listed on any real estate listing services. It considers distressed properties to be those that are either bank-owned or delinquent by at least three months.

alejandro.lazo@latimes.com


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