shadow Inventory up to 10,000,000 homes
Started by buddyparker
almost 16 years ago
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Member since: Feb 2008
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These are national numbers, but yes very sobering, thanks for sharing the link. The source is the chief economist of zillow.com, who struck me as amazingly sober given the playfulness of the site!
The number I found even more interesting is that there is an 8.6 month inventory of unsold homes nationwide, and it will take 3 to 5 years from normal appreciation patterns to reappear.
How many homes in America? That's your shadow inventory.
At an given time, for any known or unforeseen reason, any home can be listed for sale. It's about time we called the shadow inventory for what it really is, a myth. You want to talk about unsold new dev inventory? How 'bout we call that an equity upon which investors can either choose to take a loss (by selling presumably) or not. It's not uncommon for those investing in the equities market to choose to hold for the long term, rather than sell at a loss. As an investment vehicle, how is this any different? I'm baffled why everyone believes investors or corporations would be so anxious to lock in a loss by selling into a recovering market.
You're proving yourself wrong...
"How 'bout we call that an equity upon which investors can either choose to take a loss (by selling presumably) or not"
Sure, but the equity doesn't cease to exist because you didn't sell it! Outstanding shares don't change just because only a certain portion traded today.
If I have a warehouse of stuff I'm not lowering my price on, are you going to claim its NOT inventory?
"I'm baffled why everyone believes investors or corporations would be so anxious to lock in a loss by selling into a recovering market. "
Your arguing a mistaken premise. In fact, you have it backward. We've said over and over again these are folks choosing not to sell right now. Thats the definition of shadow.... exactly what you're talking about.
But that doesn't remove them from the pricing equation. If they are "waiting", then that means there will clearly be pricing pressure preventing the recovery they are looking for.