The problem with tracking the shadow inventory is that it's so, well, shadowy. I thought it might be good to just take a look at one neighborhood and see what's going on.
I decided to look back at the Villages of Queen Creek, in Queen Creek, AZ a neighborhood I've been watching since I talked a friend out of buying there several years ago. [Adam Geller of AP featured this neighborhood in a piece he wrote after M and I gave him a tour.]
When I first started driving around the Villages back in 2006, it was clear to me that I was looking at a foreclosure factory. Most of the development was done by KB Homes, part of the neighborhood was Richmond American. In the sections of the development that the builders had closed out, there were "For Sale" signs everywhere. KB Homes and Richmond however, were still opening up new sections and offering a number of incentives to buyers. It was clear that existing owners would not be able to compete.
By 2007, large numbers of homes were being abandoned. As we drove around, I remember we estimated some sections of the neighborhood as being nearly 10% abandoned.
I pulled up the Village on the Maricopa County Assessors website a few weeks ago, thinking that there must be lots of bank owned inventory in the neighborhood these days, and I would see how much of that inventory was unlisted.
I was in for a surprise. M had told me that sales had been good out in the Queen Creek area in the rush to snap up foreclosures, and he was right. I did not find a lot in the way of bank owned inventory. I still think the Villages is a good place to see a lot of shadow inventory though. Here's why:
Let's take a look at one of the properties I did find, a property on Via Del Rancho:

This property was originally sold by Richmond American in 2005 for $192K. It was taken back by the lender at the trustees sale in April 2009 for $150K. The home was not listed by the lender until November when it was listed for $120K, although you'll note that the photo was taken in July. The listing was allowed to expire after 38 days on the market, and remains off of the market. [MLS# 4222894 if you have access]
The photos from July show the house was occupied at the time. The Realtor remarks in November stated:
Tenants 48 hr. rights. Call tenant to show. Offers MUST include AS-IS, HOA, LSR or proof of funds
The house was apparently a rental, the NOT showed that the owners lived in CA.
So at this point your probably asking yourself, So what's the big deal? Twist found one property that the bank isn't currently listing. Where's the shadow inventory? Let me show you: Read the rest of this entry »