Mike Larson, Weiss Research real estate and interest rate analyst, talks with Alejandro Lazo of the Los Angeles Times.Â
The glut of troubled homes not yet on the market represents a nine-month supply at the current sales pace. That’s in addition to 3.49 million previously owned homes already on the market.
"The reality is we just built too many homes and sold too many homes to borrowers who didn’t have any business buying them," said Michael D. Larson, an interest rate and housing market analyst with Weiss Research. "Those homes have to be dealt with in one way or another."
While policymakers and regulators are hoping to whittle down some of that inventory by pushing lenders to modify troubled loans, many properties will end up in foreclosure, Larson said. Some of those homes will be sold. But others may have to be razed because they are "in such lousy shape," he said.
From the Los Angeles Times
‘Shadow inventory’ of 1.8 million homes could prolong housing slump.
By Alejandro Lazo, Los angeles Times
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."
The nation’s housing market increasingly appears headed for …
