Shadow inventory is the “surplus” of homes, condos and town homes that are distressed, and poised to enter the “resale” market via the bank's and investor's trusted real estate companies/professionals.
This was rumored to exist back in 2010 and early 2011, the rumor had coupled with it “doom and gloom”, because if this shadow inventory were to be released, it would literally have killed the real estate recovery.
It never happened. Real estate started to gain in value in almost all of the Cities across the United States. We watched a 30-38% incline in the Santa Clarita real estate prices across or cities.
That was from the bottom of the real estate market to where we are today with regard to the Housing Prices in the Santa Clarita Valley cities.
Shadow Buyers – that is a different twist to an old problem.
Shadow Buyers – those buyers that are needing/wanting to move up, move away, or move and buy another home, but are being held in place due to their current home not having enough equity for them to cut away clean.
Just like Shadow Inventory, there are rumored to be tons of people in the “shadow buyer” coffers.
When the market gets a bit stronger, and it will, they will all flood the market with their real estate listings and start making their moves.
With our team still getting phone calls with people inquiring as to how much their residential real estate is worth, thinking they are going to need us negotiate a short sale for them, when we tell them they are going to be able to sell with money in their pocket, they are elated.
But that goes to prove 1 of 2 things. Either real estate agents are still telling potential real estate sellers that their homes aren't worth as much as they really are. Or – Sellers are getting bad fair market values on the real estate they own, not having expected the market to have gotten to the point it has.
If there are these “many Shadow Buyers” waiting until the “sweet spot” appears, then this market may be in for a rough ride if the “local buyers” aren't supportive of the numbers that the Shadow Buyers will be demanding.
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