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Fading Shadow Inventory is Good News for Whittier Home Sellers!

by The Domis Team

The latest real estate news by HousingWire holds optimism for home values. According to industry analysts at JPMorgan Chase, the shadow inventory of distressed properties dropped by 1.2 million homes during the first half of 2012. By the end of the year, they expect the progress to double, bringing over 2 million homes out of the foreclosure pipeline.

Lender Processing Services reports that new mortgage delinquencies for August 2012 are down by 10.6% from a year ago. Since the peak of the housing crisis in 2010, mortgage delinquencies are down by 30%.

We have already felt the effects of shrinking shadow inventory in California, with reduced home inventory firming up sales prices. Banks are also encouraging short sales, which preserve home values far better than foreclosures. During August of 2012, short sales accounted for 23% of California market activity, with bank-owned property sales coming in at 14.4%.

During August 2012, Los Angeles County distressed property sales accounted for 36% of the market. A year ago these sales accounted for 44% of the market. Orange County shows the same improving trends, with distressed properties accounting for 27% of the market in August, compared to 33% from a year ago.

As long as short sales continue to outpace foreclosures, distressed properties will not disrupt the housing recovery. Gradual increases in home values are expected to continue. Keep in mind that there is always some degree of distressed property activity in the market, so waiting for the shadow inventory to "clear" is not a realistic goal. Anyone waiting for the bottom of our Whittier housing market has already missed it!

Would you like information about home sales in your neighborhood? When you are thinking of buying or selling a home, get the local expertise you can trust! Here at the Domis Team, we have the latest Whittier real estate market information waiting for you!

Whether you are relocating, "just looking" or ready to move, we can help! Contact us today for friendly, professional service and the best in local experience!

The Domis Team
Prudential California Realty
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Where is the Shadow Inventory of Homes in Whittier?

by The Domis Team

Have you been waiting for the other shoe to drop on the housing market? If so, you might be disappointed! The presence of the "shadow inventory" of distressed homes has been a concern in the industry for years, sidelining buyers and worrying sellers. But according to a recent report by CoreLogic, the shadow inventory is shrinking at a steady pace.

The shadow inventory consists of homes that are in some stage of foreclosure, but not yet on the market. As distressed properties put downward pressure on neighboring home values, the shadow inventory merits attention. Fortunately, the numbers have been in decline for the past couple of years:

  • January 2010: 2.1 million homes
  • April 2011: 1.8 million homes
  • April 2012: 1.5 million homes 

The shadow inventory has seen a reduction of 28% since the peak. Improved efficiencies in the handling of foreclosures and short sales, along with a reduction of new mortgage defaults, should continue to drain the shadow inventory.

In California, mortgage defaults have dropped by 28%. Meanwhile, the volume of homes on the market in Los Angeles County is down by 35%. As California was among the first states to experience the housing downturn, it is now leading the pack in housing recovery. That doesn't mean home prices will double overnight, but the demand for homes in our area is clearly outpacing supply. The majority of single-family homes in Whittier are going under contract within 30 days of the listing. 

Since foreclosures in California are typically expedited within 110 to 140 days from the Notice of Default, the distressed home inventory for our area gets absorbed rather quickly. In fact, the majority of the national shadow inventory rests in states having a judicial foreclosure process, where court backlogs have contributed to extended timelines.

The Whittier real estate market changes rapidly! If you are thinking of buying or selling a home, get the local expertise you can trust! Here at the Domis Team, we have the latest Whittier home sales data and market trends for you, plus the experience you can count on! Contact us today - we'll be happy to help you!

The Domis Team
Prudential California Realty
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Linda & Ryan Domis - The Domis Team
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16310 E. Whittier Blvd. Suite F
Whittier CA 90603
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