Should we not look at these trends and extrapolate out? That is the wise thing to do?
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Sure, we should look at all those trends.
For example in 2004-2005 if one used current trends to extrapolate where the housing market and jobs were headed (extremely low unemployment, prices rising) one could have gotten themselves into a bit of trouble.
Shadow inventory is to bears what pent-up demand is to bulls. Both are loosely defined concept which have some truth to them but are impossible to measure.
If one wants to cite shadow inventory as a force on the markets they should be forced to address the potential of pent-up demand.
