Shadow inventory sales for years to come

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Shadow inventory sales for years to come – 1.6 million distress sales in 2010, 1.6 million in 2011, and 1.5 million in 2012. By summer of 2011 REO pipeline will rise to 536,000.

Wall Street as usual enjoys denying facts until they become so obvious to the common person on the street. By then, it is too late to react. For example, subprime wasn’t a problem until it lit the fuse that set the global economy into a downward tailspin. Analysts at Barclays Capital are now coming out giving full attention to shadow inventory in the markets. Even though their report states that the pipeline for shadow inventory may be topping out, we have such a large number of distress properties in the pipeline that we won’t see any draw down of distress sales until 2012. And ultimately the sales end is what keeps prices lower because distress properties sell for less. As we know from various reports over 7 million homes are currently 30+ days late or in a state of foreclosure. The new data from Barclays looks at severe distress: More...