There has been a lot of chatter by real estate agents and the news media on the notion that there is a “shadow inventory” of homes, that will be dumping more real estate on the St. George real estate market. On last week’s show, we delivered the following results from a study performed by the Real Estate Weekly staff relaying the outcomes of Washington County Notice of Defaults filed by Recontrust (Bank of America) from October 1 2008-October 1, 2011.
Out of 1341 Bank of America Notice of Defaults filed in Washington County including St. George, a systematic sampling produced the following results:
The Notice of Defaults outcomes were….
NOD Cancelled 429 32.00%
NOD Still Outstanding 128 9.55%
Property was Sold or transferred 120 8.99%
Property Foreclosed 663 49.46%
According to our numbers, Bank of America could bring to the courthouse steps the 128 homes with NOD’s still outstanding but the other cancelled properties would need to restart the process, thereby creating months of delay in producing additional inventory. And that is why I refer to the “shadow inventory” threat to the St. George real estate market as the “Great Pumpkin” of real estate.