Thursday, March 25, 2010
Stan Humphries, the chief economist at Zillow.com talked to Aaron Task of Tech Ticker and inadvertently ended up generating the somewhat sensational headline that now accompanies the related story at Yahoo! Finance, a headline that has been embellished a bit above as detailed below. (Hopefully it's not too late already, but that Tech Ticker story begins playing the video automatically, something that I, for one, find quite annoying).
With the likely exception of real estate agents who are now working with hesitant buyers, no one really disputes the fact that there are a ton of houses that are likely to come on to the market over the next year or two both from distressed sales and from sellers who think the market has recovered enough that they'll get a decent price.
But, in the interview, Humphries was referring to the second category only and the 10 million figure came from a simple calculation that, based on a recent survey, eight percent of homeowners are very likely to sell their property if market conditions improve.
Take that potential 10 million and add it to the potential 8 million homeowners who are likely to lose their home through the foreclosure process as detailed in a number of recent reports on the "foreclosure pipeline" and you get a whopping 18 million for the shadow inventory.