While the number of houses on the market has fallen dramatically in recent months, there's some concern about the back log of houses with mortgages that are seriously delinquent, but haven't yet been taken back by the lender, or are lender-owned and not yet on the market.
That's called the "shadow inventory," and according to CoreLogic, as of January there were 1.6 million units lurking in the market. That's a six-month supply, and it's down slightly from October 2011 when there were 1.8 million units waiting to hit the market. Mark Fleming, CoreLogic's chief economist, said that half of that shadow is not yet in the foreclosure process.
So what does this mean for the market? It means that while foreclosure rates are down slightly and the number of houses on the market has fallen, there's still a backlog of distressed sales waiting to hit the market. And that means pricing pressure in areas with high concentrations of foreclosure listings.