A glut of troubled homes not yet on the market threatens to prolong a housing slump already burdened by weak job growth and a lack of enthusiasm among buyers.
This so-called shadow inventory amounted to 1.8 million properties at the end of January, Santa Ana mortgage research firm CoreLogic reported Wednesday. While that was a decrease from 2 million properties in January 2010, it remained about a nine-month supply because the sales pace has weakened this year in the absence of federal tax credits for buyers.
“We are still talking about a very large supply by any measure,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “It is going in the right direction, but we are continuing to look at a situation where there is going to be downward pressure on house prices.”
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