Shadow Inventory (homes over 90 days past due plus homes in foreclosure).
In December, First American estimated that at the then current sales rate, it would take about 3-1/2 months to run through the shadow.
In May, Morgan Stanley said the shadow inventory of homes with delinquent mortgages yet to move through the foreclosure process would take 47 months to clear at the then current sales rate in the market.
In June, S&P estimated that the shadow inventory of distressed properties that back residential mortgage-backed securities will take nearly three years to clear at the current sales rate.
Personally, I agree with Scott Sambucci, Vice President of Data Analytics for Altos Research, who says that “anyone who generalizes about the size and length of time it will take to clear the shadow inventory will be wrong”.