Definition of Shadow Inventory

What does the term "shadow inventory" mean? What is the definition of the term "shadow inventory"?

The term "shadow inventory" has taken on a life of its own over the past few years. It's one of those terms that means different things to different people.

"Shadow inventory", depending on who you ask, can include one or ALL of these homes:

1. Houses that have been repossessed and are currently awaiting sale.

2. Houses where the owner is way behind on their mortgage payments.

3. Houses where the owner is thinking of selling but is waiting for market conditions to improve.

#1 is always included in definitions of "shadow inventory", with #2 and #3 possibly being thrown in depending on who you ask.

The term is derived from the idea that these homes are "lurking in the shadows" and waiting to hit the open market.

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