Amherst Securities Group, a “leading dealer and market maker in mortgage-backed securities (MBS), agency securities and select fixed-income investments”, just published a housing report with more details on the huge overhang of shadow inventory.  The full report is not readily available on their website, unfortunately, but there is a good summary of the findings by Bloomberg in this article.  A few excerpts follow.

The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.

The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said.

“The favorable seasonals will disappear over the coming months, and the reality of a 7 million-unit housing overhang is likely to set in,” they said.

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