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[Shadow Inventory] S&P: New York Metro Highest at 103 Months

S&P just released their “Variations In U.S. Shadow Inventories Could Spell Home Price Declines In Some Areas, Stabilization In Others” report which looked at shadow inventory and its impact on the regional pricing.


source: S&P


source: S&P

The volume of troubled residential properties has been growing in nearly every U.S. state since 2005, and borrowers nationwide are now defaulting on their mortgages faster than existing defaults are being resolved through liquidation, according to Standard & Poor’s Ratings Services. These trends have given rise to a large “shadow inventory” of distressed properties—which we define as outstanding properties that are (or were recently) 90 days or more delinquent on mortgage payments, in foreclosure, or real estate owned (REO)—that haven’t yet hit the market.


source: S&P

The New York City metro area had the highest level of shadow inventory at 103.1 months, followed by Miami with 61.8 months and Boston with 58 months. The report suggests Miami is improving, but relative to what? Miami still shows more than 5 years of shadow.


source: S&P

The fallout from the recent mortgage crisis has reduced financing for borrowers as lenders began to enforce stricter underwriting standards. Lenders have generally become more selective about their borrowers, providing fewer would-be homebuyers with loans.

view press release [S&P] [1]

download report [2] [my link – S&P report link being fixed at time of this post]