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Short Sale Investing And Shadow Inventory: How Does It Affect The Real Estate Market

Short Sale Investing And Shadow Inventory: How Does It Affect The Real Estate Market


    

Short Sale Investing And Shadow Inventory: How Does It Affect The Real Estate Market

by David Corbaley

Those doing short sale investing or who are real estate agents dealing with short sales must understand "Shadow Inventory" and what it's going to mean for your future in real estate.

There are many experts who are covering this Shadow Inventory, and they can't seem to agree. Many say that it will wreak havoc on the market, while many others claim that it will have minimal effect at best.

This article will uncover secrets about the shadow inventory that many people don't want you to know about. After researching this topic in depth, I believe you should understand the concerns.

1. There are currently millions of homeowners who would like to sell, simply so they can relocate for better weather, be closer to family or similar reasons. Instead of selling, they're waiting. Waiting for the market to change, so they can capture more profit when they sell. This is called "Shadow Inventory" because what would normally be listed on the market is what you might say "hiding" until it's ready to come out. The problem arises because there will be a time when the media announce the "good market" and all of these people will want to sell at the same time. Can you say "over-supply"? This will drive housing prices down.

2. Let's talk about the six hundred thousand homes that lenders are holding in their REO inventory. Most people don't know that when a lender forecloses on a home, they don't have to sell it right away. They can hold it until they decide to sell. What are they doing? Well, they too are "waiting" for the market to go up so they can add their huge inventory to the market.

3. Here's the icing on the cake. There are 7 million homes now in default. these homes will go to foreclosure, and be added to the lenders' huge numbers, or they owners will try to sell them before the foreclosure, adding to the total number.

If you're a real estate agent working short sales, or if you're doing short sale investing, you are part of the solution. Without these solutions, the market will most likely get worse. Worse then we've ever seen it. Now is the time to learn about short sales, if you're involved at all, you can help. It can also be very lucrative.

About the Author:
Learn more about foreclosure training systems. Stop by our site where you can find out a free ebook on strategies for buying foreclosed homes and learn the top methods.


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