Last week, CoreLogic reported that the number of homes currently in the shadow inventory is roughly half the number of those currently in the visible inventory. On top of that, about half the shadow inventory has not made it into the foreclosure cycle yet. Altogether, the total shadow inventory includes 400,000 REOs, 410,000 already in foreclosure and 800,000 seriously delinquent mortgages.
Together, this means that the rate of distressed sales, which includes REOs and short sales, is equal to the rate at which homeowners are falling into some state of delinquency. Distressed sales are keeping the shadow inventory under control, with roughly 3 million completed since January 2009. CoreLogic estimates that the 1.6 million properties in the shadow inventory represents a 6-month supply. One-third of the total shadow inventory is located in California, Florida and Illinois. In addition, loans of $100,000-$125,000 represent the biggest portion of the total.
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