I ran across a couple articles that discuss how the load modification efforts for the most part have failed and the rate that foreclosures entering the market should increase significantly. I know, there has been talks of the infamous shawdow inventory forever but at least the first articles contains a lot of data.

Here are a couple quotes from the acticles and the corresponding links.

“We believe that the recent reversal in housing prices is the result of a temporary constriction in the supply of foreclosed homes on the market. This temporary constriction ensued because servicers have completed fewer foreclosures due to court delays, servicing backlogs, and political pressure to keep borrowers in their homes. However, there is a rapidly growing shadow inventory of properties where borrowers are delinquent but foreclosure has not been completed.”
http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245206147429

“Loan servicers, firms that collect payments and handle foreclosures, seem to have “nearly exhausted the supply of plausible candidates for loan modifications” and will find that many loans are “unredeemable,” the S&P study says.”
http://online.wsj.com/article/SB10001424052748703562404575067452797224606.html

Nationwide, the new construction builds have slowed dramically. Here is link that contains a chart:
http://www.calculatedriskblog.com/2010/02/q4-quarterly-housing-starts-and-new.html

It looks like the slow down is roughly compensating for some of the overbuild during the bubble. I also read in another article that builders are ramping up builds for to meet the demand for the expected rally before the housing tax credit expires.

Going forward, I’m wondering if the slow down in the new construction builds will help offset some of the shadow inventory if it does pop up in the market. Does anyone have any data on new construction builds in SD?

My thought (guess) is that the shawdow inventory if spread over a couple/few years will only have a minimal inpact on the market.