Arizona Republic Housing Propaganda: Shadow Inventory Is Great For The Market

05-28-2011 • AZcentral.com

Metro Phoenix has a "shadow inventory" of nearly 100,000 homes, the kind that market watchers sometimes fear could flood the region's long-suffering housing market and drive down prices. These homes are either in foreclosure or the owners are behind on their mortgage payments, signaling that the houses could eventually join the supply of properties offered by lenders for sale at a deep discount. But the region is actually in much better shape than other parts of the U.S. hit hard by foreclosures, according to new analysis from a national real-estate group. Foreclosure homes are selling fast in the Valley as investors jump at the low prices, and experts don't think the area's shadow inventory will suppress prices further. Analysts and investors have warily eyed the tough-to-measure shadow inventory since last year, when worries arose that banks were delaying foreclosures and holding onto large numbers of homes after foreclosing. Market watchers saw the potential for the growing backlog of homes to drive the entire market. If buyers believed more bargains were coming, they would wait and prices would fall. New data from California-based John Burns Real Estate Consulting, one of the nation's leading housing researchers, puts the number of homes in the Phoenix area's shadow inventory at about 92,000, the size of a small Valley suburb. But that number, which includes Pinal County, isn't alarming housing analysts.