Standard & Poor’s says their estimated liquidation timeline covering the nation’s backlog of distressed real estate actually increased in the past few months.
The ratings agency now estimates it will take 44 months — up 25% percent from an estimate made just three months ago — to clear the so-called shadow inventory of homes in distress or foreclosure, but not yet on the resale market. Some markets are significantly more impaired when compared to others, the agency concluded.
In September, Standard & Poor’s estimated it would take 40 months.
“Our recent estimates of months to clear have increased primarily as a result of the deceleration of the distressed property liquidation rate rather than a rise in overall distressed property levels,†according to analysts in a research report emailed to HousingWire.
Cities that experienced large price appreciation in home value have the largest shadow inventory problems. Our market is absorbing these homes very quickly, mostly from investors.