The Shadow Knows!

I am not really old enough to remember the old radio program "The Shadow Knows," when it was a regular radio feature.  But I did hear it when it was replayed on a oldies radio station. What I am talking about today is shadow inventory, what it is and how it will affect real estate prices in the Boise area real estate market.

Shadow inventory is determined in general terms,  by adding the local area's number of REO (REO stands for real estate owned, meaning property repossessed by banks, investors or government insuring agencies such as HUD or VA,) listings that are not yet on the market with the percentage of loan modifications that are expected to redefault.

According to the National Association of Realtors, Idaho has one of the lower levels of shadow inventory. That is good news for Idaho home owners although surprising for many of us that are daily invovled in the Treasure Valley real estate market.

I'll include the graphs and maps for your review. Figure 1 shows the states with the highest levels and figure 2 shows those states with the lowest shadow inventory levels.





Following is the map is the estimate of the number of months it would take to clear the shadow inventory by states.



This estimate is based on 2010 existing home sales, so any change in the rate of sales will impact the rate of clearance. So the shadow knows, but do we know?