National Real Estate Supply Above Normal

According to CoreLogic, the nation's supply of unsold homes is up 3 percent from last year and is three times the normal supply rate.

The real estate market has a surplus of unsold homes-an increased amount of which are in foreclosure, real estate owned, or delinquent-according to a recently released report from research firm CoreLogic.

“Shadow inventory” of residential property-which includes properties that are seriously delinquent, in foreclosure, and real estate owned by lenders and that are not currently listed on multiple listing services-reached 2.1 million units nationally in August, or eight months worth of supply, up 10 percent from 1.9 million units, or a five-months' supply, from one year earlier.

The report indicated that visible inventory-those included on listing services-remained flat compared to August 2009 at 4.2 million units.

The total visible and shadow inventory totaled 6.3 million units in August, up 3 percent from 6.1 million a year ago. The total months' supply of unsold homes was 23 months in August, up from 17 months a year ago.

Generally, a supply of six to seven months is considered normal, making the current total months' supply about three times the normal rate.

“The weak demand for housing is significantly increasing the risk of further price declines in the housing market,” Mark Fleming, chief economist for CoreLogic, said in a statement. “This is being exacerbated by a significant and growing shadow inventory that is likely to persist for some time due to the highly extended time-to-liquidation that servicers are currently experiencing.”

The report also found that the highest levels of distressed months' supply-the ratio of the number of properties that are 90 days or more delinquent compared to the number of sales-are in Florida, Michigan, and California. Minnesota ranked 13th in the nation with a distressed months' supply level of 16.5 in August. The Minneapolis/St. Paul metro area had a level of 17.4 in August-placing it 18th out of all major metro areas.

CoreLogic is based in Santa Ana, California, and provides consumer, financial and property information, analytics, and services to businesses and government.