One possibility for the vacancies and a contributing factor to “phantom” inventory theories could be that the foreclosure process is taking longer than it has to. Notice of default to the trustee’s sale legally requires 3 months and 21 days. Some of the vacancies might be homes that have a NOD but have not gone to a trustee’s sale. In any case, I think the over all slow pace of getting to the trustees sale or trustees sale to the MLS can give this unfulfilled expectation that we should be seeing more houses being marketed as REO, thus causing a suspicion of “Phantom inventory”.

Just a theory about something that probably to some degree is affecting this perception, at least locally.Not to say there is or isn’t any stockpiling of REO’s going on here or someplace else. Seems to me that one of the smarter data hounds here could lay out a definitive answer.