West Sacramento Short Sale Information - How Shadow Inventory is Calculated

Looking for West Sacramento short sale information? You have come to the right place. Mike Rigley Certified Default Advocate, Distressed Property Expert and your short sale specialist here thank you for joining us. Today let’s talk about How Shadow Inventory is Calculated and why it is important

According to the good folks at Keeping Matters Current, Shadow inventory includes 3 categories of houses:

1. Properties already foreclosed on but not brought to market yet

2. Houses currently in the foreclosure process

3. Properties where the homeowner is seriously delinquent on their mortgage payment (at least 90 days behind).

Categories 1 and 2 seem obvious for inclusion, but why category 3 – properties where the homeowner is seriously delinquent on their mortgage payment? They include these because studies show that 95+% of all those who fall 90 days behind on their mortgage payment never catch up, and these properties do eventually come to the market as distressed sales (either short sales or foreclosures). The percentage of those who do catch up on their mortgage payment is often referred to as the “cure rate.” Unfortunately, the cure rate is incredibly low in this new market reality. From 2000 to 2006, the cure rate averaged 45%. Since then, the cure rate has been at record lows of less than 5%. Since we now have a less than 5% cure rate those properties should be included in the shadow inventory numbers – one way or another they will need to be liquidated either though Short Sale or foreclosure.

In the County of Sacramento there are approximately 550,000 SFR and condos. Of those 550,000, approximately 27,000 or 4.9% are seriously delinquent. On average about 19,000 homes sell per year in that same area. Just the seriously delinquent properties account for an approximately 18 month supply of homes for sale and that is just the serious delinquent. That does not even take into consideration those who short sale without ever missing a payment. A six month’s supply is considered a balanced market

While many pooh-pooh the shadow inventory numbers, I say we truly need to be mindful of how it will affect pricing once those properties are liquidated. Falling prices will force more homeowners into negative equity and foreclosure.

Is a West Sacramento Short Sale Right for Me? Call me and let’s find out

To get a better idea of when your West Sacramento home will be worth what you owe, log in to www.shortsaleandloanmod.info for a free estimate or call me today for a free no obligation consultation or for the latest West Sacramento short sale information. Call me today and sleep better tonight; you’ll be glad you did