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What is shadow inventory? Explaining an often heard term in our real estate market – Macomb County MI

January 12th, 2012 · No Comments · macomb county mi real estate market, tips for home sellers

Shadow Inventory.  It’s a murky term, as the word “shadow” usually means something dark following us around.    When we hear it in a way that relates to our local real estate market, for example Macomb County and the Metro Detroit area, it means homes that are sitting vacant on our blocks and in our subdivisions that have not yet hit the “for sale” market.

I’m sure many of you have passed by these homes and see the white legal documents taped to the front doors, or the orange stickers on them, and wonder why there isn’t a “for sale” sign on the yard.   Part of the reason these homes are sitting vacant and the bank owners & asset managers haven’t put them on the market yet is because they don’t have clear title to them.  (The Detroit Free Press has an excellent article today about the back log of foreclosures and what we can expect to see.)

Once the bank owners and their asset managers obtain clear legal title, and decide to put these homes on the market we will see another wave of foreclosures hitting, and I suspect for some areas, hitting us hard.

The Shadow Inventory won’t be just that dark murky something following us around, it will be there in the form of another multitude of “for sale” signs on our streets, as well as the inevitable declining values in our own homes.    I wonder how many of you feel as I do, and wish all of the foreclosures would hit the market all at once and let the bottom of our real estate values in Macomb County hit and be done with it?    We truly cannot start a full and complete recovery in our area until we bottom out.

I am normally not a “listing agent”.  I refer most listings out to agents in my office whom I respect a good deal and know that this is what they do on a full time basis.  (I am a full time buyers agent – representing buyers in purchasing homes, not listing homes for sale and marketing them.)  If I was a listing agent though I would be on the phone to all of my potential sellers and advise them that now is the time to get their home on the market and sell, before the influx of shadow inventory hits our market.

Kris Wales – A partner for your real estate needs in Macomb County MI
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