Shadow inventory. The shadow inventories of repossessed homes banks are holding is the total number of homes foreclosed on (seized by banks) minus the number of repo'ed homes the banks are actually trying to sell or unload on the market. Example from table above: As of 7/16/2010 Cook County, IL (Chicago) had a total 28,829 bank repo'ed homes. Of those, 1,292 were actually on the market. The difference equals a shadow inventory of 27,537 homes sitting idle, off the market.
Can you imagine what would happen to housing prices if all those shadowy houses were put on the market by banks? The government can. The Fed can. And the banks especially know. Many of them would face insolvency.
Meanwhile, as foreclosures for 2010 are on a pace to exceed one million homes, the article by Mike Whitney entitled, A Decade of Declining House Prices claims, "The housing depression will last for a decade or more."
"This is by design...The bursting of the housing bubble wiped out the middle class...baby boomers are not nearly as wealthy as they believed. We're a nation of paupers."
Indeed. This is by design.
1 comment:
Ohh! This is a brutal reality check-- and interestingly the chart does not even cover the places most hard hit...
Michigan - winner highest unemployment rate for 4 years running.
Nevada- just beat out Michigan for the dubious honor of highest unemployment rate (foreclosure & unemployment go hand in hand).
Cleveland Ohio- I think highest rate of foreclosures in the nation??
My Mom's house in Chicago was awash in a sea of foreclosed homes-- over 800 in her zip code alone. More "short sales" than not on the roster. Took a few years to sell, because homes in the area- newer w better features were selling for dirt cheap. We took it in the shorts the price to sell Mom's house. Just a few short years prior Mom's place would have sold for triple the price @ the peak of the market.
Thanks Wall Street.... hope you enjoy your $500,000 bonus @ your summer home in the Hamptons.
Post a Comment