{"id":593,"date":"2010-06-14T15:09:18","date_gmt":"2010-06-14T15:09:18","guid":{"rendered":"http:\/\/www.nyonlinerealty.com\/blog\/?p=593"},"modified":"2010-06-14T16:00:47","modified_gmt":"2010-06-14T16:00:47","slug":"shadow-inventory-variants-could-trigger-regional-price-declines-report","status":"publish","type":"post","link":"https:\/\/blog.nyonlinerealty.com\/?p=593","title":{"rendered":"Shadow Inventory Variants Could Trigger Regional Price Declines: Report"},"content":{"rendered":"
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By: Carrie Bay<\/p>\n

Regional variations in the shadow inventories of distressed U.S. mortgages could be an indicator of the direction home prices will take, according to a new report published by Standard & Poor\u2019s Ratings Services<\/a>.<\/p>\n

The company\u2019s analysts say differences in the backlog of distressed properties point to which markets will see home prices stabilize or even increase, and where additional declines may still be in store.<\/p>\n

The volume of troubled residential properties has been growing in nearly every U.S. state since 2005, S&P said, and borrowers nationwide are now defaulting on their mortgages faster than existing defaults are being resolved through liquidation. These trends have given rise to a large \u201cshadow inventory\u201d of distressed properties.<\/p>\n

S&P estimates that the shadow inventory backing just private-label residential mortgage-backed securities (RMBS) will take nearly three years to clear at the current resolution rate.<\/p>\n<\/div>\n

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The ratings agency defines shadow inventory as properties that are 90 or more days delinquent, in foreclosure, or REO, but that haven\u2019t yet hit the market. S&P concludes that the original principal balance of this inventory overhang amounts to roughly $480 billion, or 30 percent of the entire private-label, non-GSE market.<\/p>\n

\u201cGiven this backlog, we believe that average home prices could fall again if demand doesn\u2019t rise in step with the potential influx of supply,\u201d said Diane Westerback, a credit analyst with S&P.<\/p>\n

The report notes that although shadow inventories remain well above historical averages in most regions of the United States, inventory levels and trends among cities varies significantly.<\/p>\n

Standard & Poor\u2019s review of the 20 major metropolitan statistical areas (MSAs) included in the S&P\/Case-Shiller Home Price Indices revealed that inventories appear to be falling from recent peaks in some areas while plateauing at historical highs or continuing to rise in others.<\/p>\n

\u201cFor instance, we estimate that the shadow inventory in the New York City metro area will take the longest to clear \u2013 at 103 months \u2013 assuming the current liquidation rates,\u201d Westerback explained.<\/p>\n

\u201cThis is almost 3.5 times our estimate for the national average, at 34 months, and far exceeds the level for the Phoenix metro area, which has a projected 16 months of inventory to clear, the lowest of the 20 MSAs,\u201d she said.<\/p>\n

Standard & Poor\u2019s analysis included all first-lien, prime, Alternative-A, and subprime mortgages that appear in non-agency RMBS transactions.<\/p>\n

http:\/\/www.dsnews.com\/articles\/shadow-inventory-variants-could-trigger-regional-price-declines-report-2010-06-11<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By: Carrie Bay Regional variations in the shadow inventories of distressed U.S. mortgages could be an indicator of the direction home prices will take, according to a new report published by Standard & Poor\u2019s Ratings Services. The company\u2019s analysts say differences in the backlog of distressed properties point to which markets will see home prices […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[79],"tags":[144,147],"class_list":["post-593","post","type-post","status-publish","format-standard","hentry","category-articles","tag-reos","tag-shadow-inventory"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/posts\/593"}],"collection":[{"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=593"}],"version-history":[{"count":6,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/posts\/593\/revisions"}],"predecessor-version":[{"id":595,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/posts\/593\/revisions\/595"}],"wp:attachment":[{"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=593"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=593"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=593"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}