Everyone’s a critic and an expert when it comes to forecasting the real estate market, myself included, and I’m the first to admit that I do have a crystal ball that can tell the future, it’s just that no one makes the batteries for the damn thing.
I do my best to remain positive and not be an alarmist, regardless of the news because there is opportunity everywhere, even with bad news.
Usually, when I read and hear about the “Shadow Inventory” in my real estate circles, there is a fair amount of fear and uncertainty in what it means for the real estate market.
In my humble opinion, the 800 pound gorilla in the room is the Shadow Inventory that is coming on the market soon – I’m not really concerned about it too much in the luxury markets of The Westside of LA, but as we’ve seen from the mortgage meltdown and the number of defaults, it may change the real estate landscape.
Shadow Inventory is the number of homes that are likely to come on the market soon. There are a number of different factors that are attributed to this shadow inventory, including:
- REOs, foreclosures and homes in delinquency
- Sellers waiting for a better market or thinking about selling their home
- New construction projects, from spec homes to multi-units and condominium projects
There’s a pretty good discussion about Shadow Inventory over at the Big Picture, albiet, a bit gloom and doom. The fact of the matter is, we have no idea what will happen when more of this distressed inventory comes on the market. My video has a bit to say if you are a Buyer in this market and how you will probably have more inventory to choose from. Drop a line and let me know what you think.