by Calculated Risk on 1/23/2009 02:57:00 PM

From CNNMoney: Flood of foreclosures: It's worse than you think (hat tip Larry)

There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market.
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The problem: Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale.
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RealtyTrac looked at listings in four states, California, Maryland, Florida and Wisconsin, and found that they contained only a third of the foreclosures it has in its database.

Usually most REOs (lender Real Estate Owned) are listed pretty quickly, although lenders typically clean up the properties and sometimes do minor repairs before listing the property, so there is some lag between foreclosure and the property being listed. The size of this "ghost inventory" is unknown.

I've also heard a number stories of lenders delaying foreclosures, probably because they are overwhelmed right now. This is another type of potential "ghost inventory", although many of these properties might already be listed as short sales by the owner.

There is also a substantial shadow inventory – homeowners wanting to sell, but waiting for a better market - so for all these reasons, existing home inventory levels will probably stay elevated for some time.