As much as the housing industry wishes foreclosures would go away — or at least be reduced to a predictable, manageable flow — there are no signs of that happening in the near future.
The volume of foreclosures also has hidden the nation’s shadow inventory, which I will define as the homes that sellers would put on the market if there were not so much competition.
(Some analysts also apply the term "shadow inventory" to estimates of the total number of distressed properties that will ultimately complete the foreclosure process to be sold at courthouse auctions or repossessed by lenders. Others define shadow inventory more narrowly as homes that lenders have already repossessed, but not yet put up for sale.)
Together, the stubborn reality of foreclosures and shadow inventory combine to be the elephant in the room, and the most important real estate story of 2010.