Decreasing shadow inventory means less competition for those thinking of selling a home in today's Boise real estate market!
Recent reports are showing that the amount of shadow inventory nationwide is decreasing, which is good news to those thinking of selling a home in Boise. Less shadow inventory leads to less future distressed properties on the market, ultimately decreasing the competition felt by Boise homeowners seeking to sell their homes in the traditional manner. According to a recent article by Jon Prior of Housingwire, banks removed 1.2 million distressed mortgages from the shadow inventory during the first half of 2012. That's a lot.
What is shadow inventory and how does it affect the Boise real estate market?
Shadow inventory refers to real estate properties that are in the following categories:
- Real estate properties that are in foreclosure. These homes may be foreclosed and later listed for sale by the bank.
- Foreclosed real estate properties that the bank is waiting to list for sale.
- Real estate properties whose owners are delaying putting the property on the market until prices improve
In today's Boise real estate market, the first two types of shadow inventory are referred to most often and are most easily measured. Shadow inventory can greatly effect the Boise real estate market because it creates uncertainty about future real estate prices. For example, if shadow inventory is high it depresses prices because buyers may hold out to buy, expecting low priced foreclosures to hit the market at a future time. On the flip side, lower levels of shadow inventory mean fewer future great buys, which encourages buyers to jump off the fence and buy now. This is great for sellers in the Boise real estate market because eager buyers, decreasing shadow inventory, and low inventory in general are giving way to welcome increases in Boise home values.
If you are interested in hearing more about shadow inventory in Boise or about how market dynamics may play into buying or selling a home in the Boise real estate market, please contact me. I'd love to talk with you more and answer any questions you may have.