[quote=bearishgurl][quote=FormerSanDiegan]…If you completely ignore shadow inventory and simply look at prices, inventory and fundamentals I think you are better off.[/quote]
I think we’re all trying to do this, FSD, but the drag of “shadow inventory” (that shouldn’t even be there at this late date) is insidiously artificially undervaluing many markets by trickling out below market short-sale closings. It is THESE closings that are ruining the comps for those homeowners who “played by the rules.” [/quote]
I have a problem with saying that shadow inventory is artificially undervaluing the market. It’s PART (a large part) of the market. These same homes (many of them) were “artificially” inflating the market when they were purchased or refi’d during the boom years.
You can argue that the market is being manipulated by banks holding onto REOs or the various government interventions. And REO’s not on the market are part of most people’s definitions of shadow inventory. But you mention below market short sales… listing that are below market get bid up to market value.
But actual listings, actual short sales, actual REO sales… those are not artificial – they are real. Closing prices ARE the market. Regardless of whether it was a short sale or an organic sale.
Next you’ll be saying that an owner that needs to sell quickly because of a job relo is artificially undervaluing the market.
