Phantom Housing Supply
"Markets with less than 10% negative equity share of mortgaged homes, the average months' supply of inventory of sale was about eight months. In markets with more than a 50% negative equity share of mortgaged homes, the average months' supply was half as much - approximately four months."
They refer to this as the "lock-out effect." It makes sense and puts the lie to what some respected analysts are calling the good news about declining inventories. Like so many metrics that used to work when the real estate market actually was a market, this too no longer has value.
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