CoreLogic Reports Shadow Inventory Continues Decline in October 2012
January 02, 2013, Irvine, Calif. –
—Shadow Inventory, Now at 2.3 Million Units, Seen as Manageable in 2013—
CoreLogic®
(NYSE: CLGX), a leading provider of information, analytics and business
services, reported today that the current residential shadow inventory
as of October 2012 fell to 2.3 million units*, representing a supply of
seven months. The October inventory level represents a 12.3 percent drop
from October 2011, when shadow inventory stood at 2.6 million units.
CoreLogic
estimates the current stock of properties in the shadow inventory, also
known as pending supply, by calculating the number of properties that
are seriously delinquent, in foreclosure and held as real estate owned
(REO) by mortgage servicers but not currently listed on multiple listing
services (MLSs). Transition rates of “delinquency to foreclosure” and
“foreclosure to REO” are used to identify the currently distressed
unlisted properties most likely to become REO properties. Properties
that are not yet delinquent but may become delinquent in the future are
not included in the estimate of the current shadow inventory. Shadow
inventory is typically not included in the official reporting
measurements of unsold inventory.
“The
size of the shadow inventory continues to shrink from peak levels in
terms of numbers of units and the dollars they represent,” said Anand
Nallathambi, president and CEO of CoreLogic. “We expect a gradual and
progressive contraction in the shadow inventory in 2013 as investors
continue to snap up foreclosed and REO properties and the broader
recovery in housing market fundamentals takes hold.”
“Almost
half of the properties in the shadow are delinquent and not yet
foreclosed,” said Mark Fleming, chief economist for CoreLogic. “Given
the long foreclosure timelines in many states, the current shadow
inventory stock represents little immediate threat to a significant
swing in housing market supply. Investor demand will help to absorb the
already foreclosed and REO properties in the shadow inventory in 2013.”
Data Highlights as of October 2012:
- As
of October 2012, shadow inventory fell to 2.3 million units, or seven
months’ supply, and represented 85 percent of the 2.7 million properties
currently seriously delinquent, in foreclosure or in REO.
- Of
the 2.3 million properties currently in the shadow inventory (Figures 1
and 2), 1.04 million units are seriously delinquent (3.3 months’
supply), 903,000 are in some stage of foreclosure (2.8 months’ supply)
and 354,000 are already in REO (1.1 months’ supply).
- As of October 2012, the dollar volume of shadow inventory was $376 billion, down from $399 billion a year ago.
- Over
the three months ending in October 2012, serious delinquencies, which
are the main driver of the shadow inventory, declined the most in
Arizona (13.3 percent), California (9.7 percent), Michigan (6.8
percent), Colorado (6.8 percent) and Wyoming (5.9 percent).
- As
of October 2012, Florida, California, Illinois, New York and New Jersey
make up 45 percent of the 2.7 million properties that are seriously
delinquent, in foreclosure or in REO. In October 2011, these same states
made up 51.3 percent of all the distressed mortgages that were at least
90 days delinquent, in foreclosure or REO.
*Previous
data was revised. Revisions with public records data are standard, and
to ensure accuracy, CoreLogic incorporates the newly released public
data to provide updated results.
The full October 2012 Shadow Inventory Report with additional charts and roll rate information is available here.
Methodology:
CoreLogic
uses its Loan Performance Servicing and Securities databases to size
the number of 90+ day delinquencies, foreclosures and real estate owned
(REO) properties. Cure rates, which measure the proportion of loans in
one stage of default that cured (versus moving to more severe states of
default), are applied to the number of loans in default at each stage of
default. CoreLogic calculates the share of loans in default that are
currently listed on MLS by matching public record properties in default
to MLS active listings. It applies the percentage of defaulted loans
that are currently listed to the estimate of outstanding loans that will
proceed to further stages of default to calculate the pending supply
inventory and adds that to the reported visible inventory. Visible
inventory is compiled from CoreLogic ListingTrends. To determine months'
supply for visible and shadow inventories, CoreLogic uses the number of
non-seasonally adjusted home sales according to CoreLogic data.
Source: CoreLogic
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About CoreLogic
CoreLogic
(NYSE: CLGX) is a leading property information, analytics and services
provider in the United States and Australia. The company’s combined data
from public, contributory, and proprietary sources includes over 3.3
billion records spanning more than 40 years, providing detailed coverage
of property, mortgages and other encumbrances, consumer credit,
tenancy, location, hazard risk and related performance information. The
markets CoreLogic serves include real estate and mortgage finance,
insurance, capital markets, transportation and government. CoreLogic
delivers value to clients through unique data, analytics, workflow
technology, advisory and managed services. Clients rely on CoreLogic to
help identify and manage growth opportunities, improve performance and
mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in
seven countries. For more information, please visit www.corelogic.com.
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