Shadow inventory dropped nearly 15 percent year-over-year in April and is at about a four-month supply—reaching its lowest level in nearly three years, real estate data provider CoreLogic reports.
Shadow inventory, as defined by CoreLogic, refers to properties that are seriously delinquent by 90 days or more, in the foreclosure process, and properties that have completed the foreclosure process but not yet have been listed for sale.
CoreLogic reports that “the flow of new seriously delinquent (90 days or more) loans into the shadow inventory has been approximately offset by the equal volume of distressed (short and real estate owned) sales.”
In April, shadow inventory was at 1.5 million units compared to 1.8 million units in April of last year.
"Since peaking at 2.1 million units in January 2010, the shadow inventory has fallen by 28 percent,” Mark Fleming, CoreLogic’s chief economists, says. “The decline in the shadow inventory is a positive development because it removes some of the downward pressure on house prices.”
Serious delinquencies are the main driver of shadow inventory, CoreLogic notes. Serious delinquencies declined the most in the following cities:

• Arizona: -37%
• California: -28%
• Nevada: -27.4%
• Michigan: -23.7%
• Minnesota: -18.1%

Source: CoreLogic