California is not nearly out of the weeds yet. According to CoreLogic, the foreclosure crisis in California may be far from over.
On March 21, CoreLogic announced that 1.6 million homes across the country were classified as “shadow inventory”—defined as foreclosures, 90 days-plus delinquencies or lender-owned properties.
California, one of the states hit hardest by these trends, makes up a large proportion of shadow inventory. CoreLogic says that California—together with Florida and Illinois—makes up more than a third of these properties.
According to CoreLogic, for every two homes for sale nationwide, there is one classified as shadow inventory.
“The shadow inventory remains persistent even though many other metrics of the housing market show signs of improvements,” said Anand Nallathambi, president and CEO of CoreLogic. “As we move into what is traditionally the peak selling season for real estate, servicers will certainly be watching closely to see if now is the time to move more inventory out of the shadows.”
Though shadow inventory was down from January 2011, from 1.8 to 1.6 million units nationwide, it has remained unchanged since October 2011. The slow foreclosure process is partially to blame for this.
“Almost half of the shadow inventory is not yet in the foreclosure process,” said CoreLogic’s chief economist Mark Fleming. “Shadow inventory also remains concentrated in states impacted by sharp price declines and states with long foreclosure timelines.”