According to the Inman News, 2/2/2011, It may take more than 4 years to clear the “shadow inventory” of distressed homes on the sidelines and in banks’ inventories. Shadow Inventory is inventory still owned by the banks, but not yet put up for sale. This level is up 11% from the previous quarter. All this simply means that home prices will suffer depressed sales values as long as there are foreclosure properties on the market. Atlanta’s months of inventory is lower than Boston, Charlotte, Chicago or Cleveland.
So why is this taking so long? Foreclosed properties are taking longer to become bank REO’s and that lengthens the overall timeline of getting the properties resold after foreclosure. Notices of foreclosure are increasing this year.