Phoenix Urban Living News. Real Estate In Phoenix Arizona

Important Facts You Must Know About Short Sale Investing And Shadow Inventory

Shadow Inventory will have a significant role in Short Sale Investing. If you’re a real estate agent that works with short sales, or a short sale investor, this is important information that you need to know.

There are many experts who are covering this Shadow Inventory, and they can’t seem to agree. Many say that it will wreak havoc on the market, while many others claim that it will have minimal effect at best.

I’ll cover exactly how shadow inventory will effect you and your business, whether you are short sale investing or doing short sales as a real estate agent, I’ll uncover the facts.

1. There are currently millions of homeowners who would like to sell, simply so they can relocate for better weather, be closer to family or similar reasons. Instead of selling, they’re waiting. Waiting for the market to change, so they can capture more profit when they sell. This is called “Shadow Inventory” because what would normally be listed on the market is what you might say “hiding” until it’s ready to come out. The problem arises because there will be a time when the media announce the “good market” and all of these people will want to sell at the same time. Can you say “over-supply”? This will drive housing prices down.

2. Lenders are currently holding an estimated 600,000 thousand homes in inventory that they have foreclosed on. Why? Simple, they’re waiting for the market to “turn around” so they can get more money for their REO properties! Again, when they market turns, this inventory will be added to the millions of homes from the previous list - homeowners that just want to sell.

3. There is an estimated 7 million homeowners currently in default in the US. this is massive beyond all measure, and will add to the 2 above. They will be trying to sell before losing their home to foreclosure, or simply adding to the banks’ inventory.

There is a solution. Real estate agents being aggressive and working with short sales, and people who are doing short sale investing hold the key. These two solutions will provide to be the saving grace for the nations failing real estate market. Normal sellers will not be able to compete with short sale pricing. If you’re not in the short sale markets, you need to be.