Shadow inventory continues to decrease

Last week, we wrote about decline of foreclosure inventory in some areas of the county, which resulted in realtors calling for an acceleration of foreclosure processing to meet the demand for lower priced properties. As it turns out, that inventory of foreclosures has indeed gotten smaller, as reflected in S&P's recent third-quarter update - shadow inventory (where borrowers are 90 days or more delinquent, in foreclosure, or REO) has declined every quarter since mid-2010.

“We believe this points to a continued drop in the amount of time it will take to clear this ‘shadow inventory’ over the next year assuming national liquidation rates do not decline abruptly,” said the S&P report (quote via

S&P estimates it will take 45 months to clear the supply of shadow inventory in the market.