In another positive sign for the housing market, the nation’s so-called shadow inventory of properties in the foreclosure pipeline fell by more than 10 percent in July from the same period a year before reported CoreLogic.
The Irvine-based tracking firm said the number of housing units in jeopardy of foreclosure, or which have been repossessed by lenders but not yet listed for sale, dropped from 2.6 million in July 2011 to 2.3 million in July 2012.
“Broadly speaking, the shadow inventory continued to shrink in July,” said Anand Nallathambi, president and CEO of CoreLogic. “This is yet another hopeful sign that the housing market is slowly healing.”
The report should be welcome news for homeowners who are worried that the value of their homes could be further depressed by a wave of foreclosure sales.
The real estate market has generally been on a path toward recovery this year, with home prices pressed upward by the low inventory of homes on the market and record-low 30-year mortgage rates, which have fallen below 4 percent.
Experts have pointed to the shadow inventory as a potential threat to the fledgling upturn. Large numbers of foreclosed homes hitting the market could drive prices down.
Last year, a Bee analysis placed the region’s shadow inventory at 53,256 homes in Sacramento, Yolo, Placer and El Dorado counties. That included about 12,285 homes owned by lenders but not yet sold.
The improving economy and alternatives to foreclosure, including short sales and loan modifications, have helped prevent homes from becoming part of the shadow inventory.
All told, the shadow inventory in the United States was worth about $382 billion as of July, the firm estimated. That’s down from $397 billion a year ago, it said.
Forty-five percent of all distressed properties are in five states: California, Florida, Illinois, New York and New Jersey, CoreLogic reported.