Dear TZ – Should I be afraid of the Shadow Inventory?

Dear TZ,

I keep hearing about something called a shadow inventory. What is it? How does it impact me and my home?

Thanks,

Homeowner Harry

 

Dear Harry,

Shadow inventory…  Almost sounds scary, like it’s lurking in the forest waiting to jump out at you.

Very simply there have been homes that have been foreclosed that are now bank owned properties.  Much of that inventory is not yet on the market, hence it’s in the shadows.  The amount of inventory is not measured in houses, it’s measured in months, meaning that if no new houses come on the market, how long will it take to empty the shadow inventory at the current rate of sales.

Let’s say you live in Washington State, where there are only 4 months of shadow inventory.  Well the news there is good.  Those homes should sell and not bog the market down due to all the new inventory that it’s creating.

We happen to live in New Jersey, which currently has the greatest shadow inventory – a 65 month supply.  Yes, you read that right!  If no other homes come on the market it will take 5 years and 5 months to clear out the inventory.  Sounds like New Jersey will have a rough time.   In truth parts of the state will, while other areas won’t be affected as badly.  For example, Newark will be hit much harder than let’s say Westfield or Summit.  Towns surrounding the hardest hit urban areas will more likely feel the effect of the shadow inventory more than an upscale suburb will.

So while New Jersey has the largest shadow inventory, New York is a distant second with 41 months of shadow inventory.  In fact other than New

Mexico, Louisiana, Florida and North Dakota the states with the most shadow inventory are all in the Northeast.  This is largely due to the fact that many of these are legislative states where foreclosures must go through the courts, thus further slowing down the process long enough for significant inventory to accumulate.

So what does it all mean?  Well if you’re in a state with a higher shadow inventory and you might want to sell, do it now, because prices will continue to fall until the demand is larger than the supply.  If you’re going to buy you may “pay less” by waiting, but if interest rates rise, they way the experts are predicting, but your monthly payments will probably be higher than if you were to buy now.

Good luck!

- TZ

 

Please note that all information is reliable but not guaranteed.  Please consult with your Real Estate professional before making any Real Estate decisions.

Wayne and Jean 

The Ghost of Hannah Caldwell

Last week, we featured guest blogger Gordon Bond who told us some fascinating Union County lore, including the story behind the Union County official seal.

Hannah Caldwell, wife of the Fighting parson Reverend James Caldwell, was the first woman killed during the American Revolution. Hannah and her husband are buried in the cemetery next to the Union County Courthouse. How she was killed isn’t certain – some stories say she was mistaken for a sniper by a British redcoat. Others say she was murdered in retaliation for her husband’s activities. Still others say that it was just a stray shot that killed Hannah. Either way, her death rallied the area’s farmers to participate in the Revolution.

As long ago as the 1970s, people reported seeing ghosts in the cemetery and courthouse. Some suspect that one of the ghosts is that of Hannah Caldwell herself. Custodians report seeing a woman all dressed in white near the elevator. Visitors report lights flickering and elevators opening and shutting on their own. Other people report seeing a woman in white colonial clothing floating through the parking garage and court corridors. The face of Hannah is sometimes seen in the window of the first floor office. Ringing bells and footsteps are heard in the courthouse Rotunda. A psychic paid a visit to the courthouse and reported that Hannah was not pleased with the way her murder was depicted on the Union County seal.

Sci-Fi channel’s Ghost Hunters featured the Union County Courthouse and cemetery in 2009. While there, the crew heard footsteps while sitting in the Rotunda, and corroborated this with a high EMF (electromagnetic field) reading – sometimes an indicator of paranormal activities. Many crew members reported seeing a shadow pass by a painting of James Caldwell. They captured footage of an apparition walking across a room and through a wall. Other footage shows an apparition vanishing along a path.

What have you seen at the courthouse?