This shadow is not the superhero. But, like the superhero from the 1930s, this shadow has “the power to cloud men’s minds so they cannot see him.” Don’t let the spectre of “shadow inventory” negatively impact on your desire to sell your home this year.

Shadow inventory is the growing collection of homes that are gradually being released to the real estate market. This inventory is made up of bank-owned properties in foreclosure (sometimes called REOs), as well as “future” foreclosures…homes whose owners are seriously delinquent on their mortgage payments. As more “shadows” hit the market, the law of supply and demand dictates that home prices will soften. This can be particularly troubling given that foreclosures often sell at a 41% discount.

North and South Carolina are among the top 26 states with the highest levels of shadow inventory. We can take some comfort from the fact that 7 states (Arizona, California, Florida, Nevada, Illinois, New York and New Jersey) account for nearly 60% of that inventory.

So, what to do now if you want to sell your home? Of course, first talk with your trusted Allen Tate, REALTOR®. He or she will be in the best position to advise you as to how “the shadow” is impacting your community and neighborhood. If you have equity and good credit, you’ll be in a great position to put a compelling price on your home to get it sold NOW before the shadow inventory begins to erode prices further. Then, you’ll be able to take advantage of the low (but slowly rising) mortgage interest rates to buy your dream home. Take another look at Pat Riley’s post about Cost vs. Price.

Your Allen Tate, REALTOR®, is the local homeownership expert. We’re here to help you stay out of the shadows…no matter how scary they may appear.

By Tom Gongaware