Much has been made in recent months of the so-called “shadow inventory,” a huge pool of bank-owned properties yet to reach market, which some claim will create havoc on local real estate prices.

But a new look at recent numbers by B&T and the MAR reveals that some of those shadows may not be as deep as once thought.

According to recent stats from MAR and Banker & Tradesman:

Almost 90 percent of the properties foreclosed on in January 2008 – 708 out of 802 – were purchased at auction by the lender. By December 2009, even as foreclosures were continuing at a high pace, banks took back only 578 of 858 foreclosed properties, or 67 percent – a more than 25 percent drop in the bank take-back rate.

Some of the purchasers of foreclosed properties include real estate trusts and condo associations, which can also initiate foreclosures.

But even when banks took back the properties, they had success in moving those REOs off their books. More than 70 percent of the foreclosures that banks took back from April through September of last year, or 2,614 properties, were sold within the last six months.

That leaves 1,065 unsold REO properties as the so-called shadow inventory. That number becomes even less daunting when considering that last year, total listings per month ranged from a high of 42,355 in June to a low of 30,685 in December, according to the Massachusetts Association of Realtors

So the MAR (which I understand some readers don’t trust) seems to think that the “shadow inventory” debate is exaggerated as it pertains to local real estate prices.

Any thoughts?

Author Profile

John Ford
John Ford

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs

In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.


For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.


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John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.

John Ford
Ford Realty Inc
137 Charles Street
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