Quote: Crunching the shadow numbers

“My best guess right now is that REO held by Fannie, Freddie, and FHA, and other government entities, and banks and thrifts is just under 600-thousand, but unfortunately it is on the rise,” says [economist Thomas] Lawler.

Now compare that 600,000 number to the 564,000 homes that the National Association of Realtors reported sold in June.

That’s all homes, not just distressed homes.

So fewer homes sold than exist in REO.

But now, and I promise this is the last number, take a look at the number of distressed sales each month, about 150,000. That means that we have a four month supply just of foreclosed properties.

Yes, there are plenty of cash buyers out there, looking to scoop them up, but they will do so only at very reduced prices. So here we go again on price pressure.

– Diana Olick of CNBC, doing the math on “the real key to the housing recovery” — the shadow inventory of foreclosed properties across the nation. Her article from yesterday delves into the difficulties of getting good estimates for the shadow market, especially where big banks and private holdings are involved.

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