[quote=WarChestSM]I actually think there is a lot of shadow inventory but in a different way. Around my area in Los Angeles there is extremely limited inventory, yet I keep seeing houses come up for rent. I feel like everyone got the memo on “low inventory equals higher prices”, and thus people are on the margin hanging onto properties and renting them out instead of selling them in hopes of even bigger gains over time…Softer rental prices or much higher interest rates probably would change things but both of those seem to be happening very slowly so far.[/quote]
shadow inventory isn’t applicable to hot RE areas like san diego, but was trying to get a feel for the mechanism by which its possible to hide stuff (off balance sheet)
I’ve read right after the 2007/2008 crash lots of hedge funds bought up RE
and most likely that is where some of the “shadow inventory” made its way back into the real world
users of this board aren’t into all the exotic “investments” (nor am I for that matter) but just thought I’d ask anyway because wonder if the same mechanism as I was told was used to juggle RE (off balance sheet) would work for various toxic assets in the international markets (i.e. off balance bank balance sheets for deutsche bank, etc.)
