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The goal of Cityscape is to bring high-quality original research on housing and community development issues to scholars, government officials, and practitioners. Cityscape is open to all relevant disciplines, including architecture, consumer research, demography, economics, engineering, ethnography, finance, geography, law, planning, political science, public policy, regional science, sociology, statistics, and urban studies.

Cityscape is published three times a year by the Office of Policy Development and Research (PD&R) of the U.S. Department of Housing and Urban Development.

  • American Housing Survey
  • Volume 14 Number 1
  • Managing Editor: Mark D. Shroder
  • Associate Editor: Michelle P. Matuga

Shadow Inventory: Influence of Mortgage Modifications and State Laws

Mark Fleming, CoreLogic®

As with the articles in this issue, this introduction reflects the views of the authors and does not necessarily reflect the views of the U.S. Department of Housing and Urban Development.


As the housing market seeks stabilization and eventual recovery, one of the most significant deterrents is the magnitude of the shadow inventory. Unlike the visible inventory of homes for sale— those listed for sale on multiple listing services (MLSs) or directly by homeowners—the shadow inventory is the stock of homes that are likely to be for sale in the future but are not yet listed or “visible.” CoreLogic® (2011a) estimated the shadow inventory to be 1.6 million single-family residential homes in October 2011, compared with 1.9 million a year ago. The shadow inventory is smaller than its peak of slightly more than 2 million housing units in January 2010, but it remains significantly elevated relative to the level that would occur under healthy market conditions. The elevated shadow inventory level is a significant drag on the health of the housing market, because it represents the future stock of distressed-asset sales that, when sold at a discount to market value, place downward pressure on price levels. The shadow inventory and its effect on housing markets will vary dramatically based on foreclosure laws and disposition timelines.

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Note: Guidance documents, except when based on statutory or regulatory authority or law, do not have the force and effect of law and are not meant to bind the public in any way. Guidance documents are intended only to provide clarity to the public regarding existing requirements under the law or agency policies.