Can someone explain what shadow inventory means?

A developer has 200 units in his building. If he tries to put all 200 units on the market at the same time, it depresses the price. So he puts 50 on the market. The other 150 is shadow inventory.

in addition, individuals that try to sell their apartment, fail, take them off the market to try again in the near future. This is a hard number to count. We say that the shadow is an unpublished amount of inventory that will have to be sold, rented or, burned to the ground for insurance money. Knowlege of this depresses the pricing of what's 'on' the market currently but, in an inexact way. It's also a factor as to why so many here at SE think the market will continue to erode over time. Then again there are the bulls that think the rest of us are yellow belly whining wimps with no hope for the future which would be funny...if they were right...which they are not. That's the yin and yang of SE!

Listings by the Sunshine Group's evil nemesis.

wanderer. Thanks for the comment; it's nice to be appreciated. A little mysogyny always spices up the evening, too. You and falcobigot make a beautiful couple.

Lases - me hopes you keep trying but that you don't succeed in buying - for another 3 years at least - then you'll be able to buy much more apartment for the same money. Be a happy renter. If you didn't buy before 2000 then you should buy until 2011.
Patience.

shadow inventory also refers to properties that in a normal market would be listed but aren't currently, such as REO that the banks won't list, properties that are inhabited by non-paying owners, properties where the owners are underwater and need to sell but can't, etc.

i missed an interesting evening while imbibing at the GH.

Thanks All for your answers. I kind of thought it was the first answer, but didn't think about the others. One other question...

If I make an appt to see an apartment at a new construction building that has 15 listings, but there are "shadow" apartments that are of similar features will the broker be able to show those to me to give options on layout/floor #/exposure/etc? In other words, can I ASK if there is shadow inventory or will it be offered to me? Or maybe the broker won't offer b/c he'll only want to sell his (since I'm not using a buyer's broker).

Jazzman- Don't worry. I don't intend to throw my money at anyone. I'm planning on driving a hard bargain/lowballing (and won't buy if I don't get a *great* deal). I'm very flexible, in no hurry & don't mind renting... but I'm not putting my life on hold either.

lases, i've had both situations. sometimes brokers won't release any additional units, but i've also had brokers show me plans for units that haven't been released yet, indicating that they'd be willing to release them if i'm interested.

act as i do naturally...dumb..dont use the phrase "shadow inv"...ask if there are any apts the dev'per is holding for himself or friends, or something as stupid as the explanation the broker will offer if they represent there are, in fact, more units..they often refer to units as having not been been "released" for sale yet, as though there are hungry leemings about to knock down the door to buy before the market doubles and they can no longer afford!!

have fun

back in the day dev'pers were able to parcel out apts for sale, often raising prices numerous times as they sold off their stock--new day