Shadow Inventory. What is it and how will it effect you?

When making the decision to sell, buy or invest in today’s real estate market the most valuable asset a buyer or a seller can have is the most current and up to date information of what is going on locally and nationally.While in a real estate meeting this week, I came across some interesting statistics I think would be valuable to share.   I had the opportunity to meet with top foreclosure real estate specialists who had just come from a very informative meeting with top administrators of both Freddie Mac and Fannie Mae.

Statistics of future foreclosures were projected.   This is called “shadow inventory”.   These are homes that Freddie or Fannie has not received a mortgage payment on in the past 90 days to 2 years.   These are homes that will be foreclosed on in the future.   So what is the number?   Well, Fannie Mae is projecting about 5 million, Freddie Mac is projecting 3.5 million, and other national banks are looking to foreclose on 2 to 3 million homes.   Now these are national projections.   These foreclosed homes will be spread out across the country.

Keep in mind that Freddie Mac, Fannie Mae and other financial institutions already know that these foreclosures are going to happen.   What is being discussed is how to do it, without completely glutting the market with foreclosures.   It will be interesting to see how they go about dumping these homes onto the market little by little.

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