U.S. shadow inventory falling

The amount of shadow inventory - homes that are seriously delinquent, in foreclosure or owned by banks but not on the market - is shrinking, according to a new report by CoreLogic.

CoreLogic estimates there were about 2.3 million such homes in the country as of October, a 12.3 percent drop from the year before.

CoreLogic said shadow inventory estimates were not available by state or metropolitan area.

Shadow inventory can weigh on the housing market and drag down prices.  Shadow inventory often sells at a steep discount, depressing neighborhood values. It can scare buyers and reduce demand.  Shadow inventory is typically not included in trade group reports.

Nationally, homes in shadow inventory are estimated to be worth $376 billion, down from $399 billion a year ago, CoreLogic says.

Nearly half of the U.S. homes counted as shadow inventory were seriously delinquent but not yet foreclosed, said Mark Fleming, CoreLogic's chief economist. Fleming said the inventory posed little threat to the housing market, which recently has shown promising signs of recovery.

"Given the long foreclosure timeline in many states, the current shadow inventory stock represents little immediate threat to a significant upswing in housing market supply," he said.

Fleming also said demand from investors will help absorb the already foreclosed and bank-owned properties.

Last January the Observer analyzed data and reported that shadow inventory in Mecklenburg County outnumbered active home listings by 2 to 1. About 13,000 Mecklenburg homes were owned by people more than 90 days delinquent on their mortgage. More than 3,800 homes were owned by lenders but not listed for sale.

For Wednesday's report, CoreLogic estimated the current stock of properties in shadow inventory by calculating the number of properties that are seriously delinquent, in foreclosure and held as real estate owned by mortgage services but not currently listed on multiple listing services.  Properties that are not yet delinquent but may become delinquent were not included.