Each day our news feeds are announcing the worst is over, often celebrating a recovery in the housing market.
Anyone walking through one of our offices would probably agree with the reports… we are busy. The phones are ringing, homes are selling quickly – and homebuyers are ready. Is that a recovery? Perhaps – if this wasn’t New Jersey.
We are as hopeful as anyone about a true recovery. However, very few news outlets in our area are discussing the surge of shadow inventory in our state. What is shadow inventory? Shadow inventory is commonly defined as bank owned homes that are not yet on the real estate market, as well as homes that are in serious default and headed toward foreclosure.
New Jersey is a judicial state requiring that foreclosures are administered through the court system. When those proceedings ground to a halt over the “robo-signing” investigations, the backlog of foreclosures grew. The shadow inventory grew.
Short sales continue to move ahead, but there are still many distressed properties waiting to hit the market. There are many homeowners who are struggling to stay in their homes – and trying hard to avoid foreclosure.
Even if those homeowners are able to avoid default, NJ already leads the nation with a whopping 65 month supply of shadow inventory already in the pipeline (according to NAR research).
If you are buying or selling real estate in the near future, contact us to learn more about how shadow inventory will impact our local market. Timing is everything in real estate, and while we can’t predict the future – we can arm you with the information you need to make the best decision for your future.
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