The housing markets continues to recover. Corelogic is reporting that the shadow inventory of homes declined by more than 10%. The company states....
CoreLogic® (NYSE: CLGX), a leading provider of information, analytics and business services, reported today that the current residential shadow inventory as of July 2012 fell to 2.3 million units, representing a supply of six months. This was a 10.2 percent drop from July 2011, when shadow inventory stood at 2.6 million units, which is approximately the same level the country was experiencing in March 2009. Currently, the flow of new seriously delinquent (90 days or more) loans into the shadow inventory has been roughly offset by the equal volume of distressed (short and real estate owned) sales.
Data Highlights as of July 2012:
Some are expecting the latest surge in US home construction to lift economic growth. Even though it is indeed a positive development, construction however will have only a limited contribution to the GDP.
Home construction in the US has indeed been on the rise due to tight housing inventories (see discussion), particularly in neighborhoods where people actually want to live. Here are a couple of examples:
But even if the total residential construction spending accelerates, right now it unfortunately accounts for only about 1% of US GDP. So as much everyone wants to see construction drive GDP (as it did to some extent during the boom years), it is still a fairly insignificant contributor to the overall output.
CoreLogic® (NYSE: CLGX), a leading provider of information, analytics and business services, reported today that the current residential shadow inventory as of July 2012 fell to 2.3 million units, representing a supply of six months. This was a 10.2 percent drop from July 2011, when shadow inventory stood at 2.6 million units, which is approximately the same level the country was experiencing in March 2009. Currently, the flow of new seriously delinquent (90 days or more) loans into the shadow inventory has been roughly offset by the equal volume of distressed (short and real estate owned) sales.
Data Highlights as of July 2012:
- As of July 2012, shadow inventory fell to 2.3 million units or six-months’ supply and represented just over three-fourths of the 2.7 million properties currently seriously delinquent, in foreclosure or in REO.
- Of the 2.3 million properties currently in the shadow inventory (Figures 1 and 2), 1 million units are seriously delinquent (2.9 months’ supply), 900,000 are in some stage of foreclosure (2.5-months’ supply) and 345,000 are already in REO (1.0-months’ supply).
- The dollar volume of shadow inventory was $382 billion as of July 2012, down from $397 billion a year ago and $385 billion last month.
- Serious delinquencies, which are the main driver of the shadow inventory, declined the most from April 2012 to July 2012 in Arizona (3.2 percent), Pennsylvania (2.8 percent), New Jersey (2.3 percent), Delaware (2.2 percent) and Maine (2.2 percent).
- As of July 2012, Florida, California, Illinois, New York and New Jersey make up 45 percent of all distressed properties in the country.
Some are expecting the latest surge in US home construction to lift economic growth. Even though it is indeed a positive development, construction however will have only a limited contribution to the GDP.
Home construction in the US has indeed been on the rise due to tight housing inventories (see discussion), particularly in neighborhoods where people actually want to live. Here are a couple of examples:
1. Star-Telegram: - New home construction in Dallas-Fort Worth jumped 34.5 percent in the third quarter compared with a year ago, the fifth straight quarter of gains and the best since the second quarter of 2010, Residential Strategies said Thursday.
2. WRAL: - Wake County's slowly improving housing market got more good news recently, as the National Association of Home Builders predicted that home building could be back to normal by the end of 2013. Home construction is up 27 percent compared with this time last year, despite only 1,500 new homes being on the market in the county.But unfortunately just as single family home construction momentum picked up, multifamily construction has slowed - offsetting some of the gains.
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| Source: JPMorgan |
But even if the total residential construction spending accelerates, right now it unfortunately accounts for only about 1% of US GDP. So as much everyone wants to see construction drive GDP (as it did to some extent during the boom years), it is still a fairly insignificant contributor to the overall output.
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