A new report shows that the decline in shadow inventory in Florida suggests there is less of a threat to the real estate market than there has been over the last few years.
One of the problems that has been facing the real estate market in Florida, as well as the rest of America, is the amount of shadow inventory still out there. Shadow inventory refers to homes that are not yet in the inventory for sale but are at some stage of foreclosure. These are therefore quite likely to enter the market when the foreclosure proceedings have finished.
The shadow inventory has been something of a problem to real estate recovery for some years, with many experts concerned that home prices would stand still or lose value if buyers carried on avoiding the market or ran into trouble when trying to qualify for a mortgage.
Florida Realtors Industry Data and Analysis has issued an updated report showing that Florida's shadow inventory is continuing to decline. John Tuccillo, chief economist for Florida Realtors, said the problem of home prices stagnating seems less likely with this decline.
"That problem seems less of a threat as time passes," said Mr Tuccillo. "Lenders show an increasing willingness to encourage short sales, so they don't have to submit properties to the foreclosure process. In Florida, a foreclosure must go through a lengthy - and expensive - judicial process. While waiting for a final ruling, it costs lenders money to hold and maintain property."
