June, 2012:

What does shadow inventory mean in real estate?

Shadow inventory generally refers to distressed properties that are not yet on the market for sale. These properties “shadow” the active inventory in that they will (or should) be on the active market sometime in the near future. For statistical purposes, shadow inventory is included as a segment of the “unsold” properties.

Shadow inventory consists of those properties in some stage of default or foreclosure, as well as properties already owned by the foreclosing lender. Because many lenders are now accelerating their foreclosure actions against delinquent borrowers, the actual shadow inventory is expected to decline as such properties graduate to the “active for sale” market.

Year-to-date, foreclosure filings are up 142 percent in Okaloosa County and 63 percent in Walton County. Destin, Ft. Walton Beach, Sandestin and 30-A are all represented in the equation.  

For more on this topic, visit www.FloridaBrokers.com or email us at smith@realtor.com