[Image][Image] [This] "Shadow inventory has the potential to give us another leg down on home prices during the second half of the year," said Steven Wood, chief economist at Insight Economics in Danville, California... "It appears that there is a significant amount of shadow inventory in the form of bank owned properties, which will continue to grow with the rising in delinquencies," he said...
Doctor Housing Bubble concludes, "...with those toxic Alt-A mortgages, how many homeowners are going to opt for the ridiculous modifications that basically make them lifelong renters with zero mobility? ...Summer selling season is nearing the end and we are now going into the slow selling season with shadow inventory coming into the light."
Buckle your seat belts: it would appear that a major deflationary spiral has yet to unwind.
Each foreclosure harms the prices of neighboring homes; this leads to more underwater mortgages; which, in turn, results in more foreclosures... rinse and repeat until done. And banks will have to continue hiding as much shadow inventory as possible, especially in California, to prevent a real financial crisis.
"Disturbing Chart of the Day"
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