The Truth About Shadow Inventory In Phoenix Real Estate Market
With a little bit of examination, the claim that there is a tremendous shadow inventory on the Phoenix real estate market is easily banished. Unfortunately, homeowners and homebuyers are oftentimes led off the path by faulty reporting, already in major news outlets. There are resources that can be inspected to get a precise evaluation of how much inventory may be obtainable and that is currently with lenders.
Reuters, one of the biggest news agencies in the world, announced in July of 2012 that price gains in Phoenix – and other so-called foreclosure-heavy cities such as Miami – are largely because edges own a great deal of inventory that they’re not putting on the market. The reason given for this is a possible scandal due to robo-signing on the part of edges. Unfortunately, the information put out in the media is inaccurate.
In the Phoenix market, at the minimum, if the edges were to let the inventory that they currently keep up onto the market, it would make a unimportant or no difference at all in the prices for homes, specifically considering how much need has increased over the last year.
Not That Many
The Cromford Report follows the amount of inventory that is held by lenders. This tracking is only attainable by subscription, but it keeps record of Phoenix real estate inventory unequivocally. According to these reports, there aren’t already 5,900 residential similarities in the hands of lenders. Almost half of them are already active, some of them are pending sales and others are off of the market on ARMLS, according to Arizona Real Estate Trends.
Of the inventory not included in that number, lots of them are under leases and are occupied by tenants. The reporting mentions that, already if that housing inventory was released onto the market, it would explain less than two weeks of inventory in the Phoenix real estate market. This would not have any meaningful effect on the prices of homes in the overall market. In fact, in a healthy real estate market, the inventory is usually somewhere in the neighborhood of six month’s worth of similarities.
Not Many Foreclosures
Another popular conception is that Arizona is one of the worst states in the nation as far as foreclosure rates go. In fact, Arizona has a foreclosure rate that is below the national average. Currently, according to the reporting, Arizona has approximately 5.9 percent of its homes which are 30 days delinquent and not however in foreclosure. The national average for that same figure is 7.6 percent. As for homes that are more than 30 days delinquent and that are in foreclosure, Arizona has a rate of 8.7 percent, while the nation as a whole has an average of 11.3 percent.
Though the two states are often mentioned side-by-side in real estate reporting, Florida has a 21.3 percent rate of loans that are 30 days or more past due and that are in foreclosure, establishing that Arizona is in better shape than is portrayed in the media. Shadow inventory on the Arizona real estate market, quite simply, is a fabrication.