More Foreclosures to Come Onto the Market

First American CoreLogic released data on Thursday indicating that 1.7 million REO’s and potential foreclosures hadn’t hit the market by the end of the third quarter.

Based on the current sales pace, it’ll take 3.3 months to get rid of all of these homes. (Compare that with last year’s 1.1 million homes.)

This is not information you’ll find in official measures of unsold inventory. The official number of unsold homes currently on the market stands at 3.8 million as of the end of September. That alone could take 7.8 months to sell. Add to that other unseen and marketed properties and you get 5.5 million
units.

All this indicates that while officially numbers are down towards the end of this year the actual impact these foreclosures will have on the housing market will be much greater than experts predict.

This "shadow inventory" may make its way on to the market in huge bundles, or in steady, manageable streams. Either way, its impact on the market will be immense and provide some ripe opportunities for the timely investor.