We sold 38,100 DSF (single family) + 11,600 CND (condo/townhome) in 2005 (total = 49,700 resale homes, not counting new construction). This declined to 29,100 DSF + 8,230 CND = 37,339 resale units sold in 2009. In the unlikely event the shadow market homes were dumped on MLS tomorrow morning, we could sell what we sold in 2009 AND all of the shadow homes and still be under the sales volume in 2005!
Here’s another, more realistic way to look at it. Most of the shadow homes will likely (be) under the median sales price. That’s $210K for DSF and about $165K for CND. For this least-expensive half of the market, we have 2.3 months of inventory for DSF (six months is normal) and 4.3 MOI for condos. Blended, it’s 2.9 MOI, a pretty strong seller’s market. If you dumped all 8,800 shadow units on the market tomorrow, we’d increase to 8.7 months of inventory. That is a slight buyers market. More likely, the shadow market will be trickled slowly onto the MLS over months, if not years.
Chicken Little might be wrong about the shadow inventory market making the sky fall on our real estate market.”