I’ve felt for a while, based on anectdotal stories, that the “shadow inventory” isn’t in the bank owned properties.. It’s the limbo’d properties that the owners have stopped paying – but the bank had NOT foreclosed. For whatever reason: loan mods, moratoriums, banks not wanting to acknowlege the loss… It seems that the banks are not moving properties that are delinquent into the foreclosure/courthouse sale.
As far as inflation vs wage inflation. I’m old enough to remember a few economic cycles. The 70’s come to mind as the most obvious example – a recession with a jobless recovery. Lots of unemployment ever after the recession was nominally over. I can see that happening again.
I also think jp makes a good point. The past decade’s economic “growth” was based on over leveraged consumers. Now that credit is less free/easy, there is less money for consumers to spend. That goes for housing, retail, everything.
