Don’t Forget the Forgotten Inventory

Don’t Forget the Forgotten Inventory. Don’t Forget the Forgotten Inventory by Steve Cook Job seekers who give up looking for employment are not counted as unemployed.  They become invisible to the statisticians, but when the job picture improves, as it has in recent months, they flood employment lines and have a huge, unforeseen impact on unemployment rates.   Likewise, sellers who take their homes off the market create an invisible supply of properties that might play a big role In boosting inventories when better prices encourage sellers to put them back on the market.   The dramatic drawdown in inventories in most markets over the past year has led some to wonder whether a sizeable volume of properties will be listed for sale at the first sign of price recovery, possibly killing or dampening price appreciation (See Are Sellers Withdrawing?).   Tallahassee broker Joe Manausa made a convincing case for the “Forgotten Inventory,” as he calls it, in a post last week on Active Rain, a site popular with real estate professionals.   “Would you be surprised/shocked to discover that the homes listed for sale in the MLS only represents about 20 percent of the real inventory of homes that need to be sold?” he wrote.   “You might never have thought about it, but there have been a lot of homes that failed to sell during the housing correction, and those that remain unlisted and unsold are a group that I call the Forgotten Real Estate Inventory.  It is the growing group of homeowners who have given up hope of selling their home, but they still want to move.”   The number of homeowners who delayed selling their home because of the real estate market (17.5%) has not grown in the past 18 months but actually declined slightly (-1.7%), which suggests the pending supply of ‘visible’ homes is showing signs of stabilization.  However, more homeowners ages 35 to 49 (22%) and those making [...]