A decade ago, housing experts warned — incorrectly, it turns out — of a Tsunami of “shadow” inventory waiting to flood the then-moribund housing market, and drag prices still lower.  See, “Barry Ritholtz Issues Mea Culpa on Housing.”

The source of all those homes?

Banks sitting on millions of foreclosures nationally.

Fortunately, it never happened: banks bundled their properties by the thousands and sold them, wholesale, to institutional investors (who subsequently turned them into rentals).

Meanwhile, climbing prices eventually rescued many previously underwater homeowners.

Fast Forward a Decade

Today, amidst an acute shortage of listings in the Twin Cities and elsewhere, there’s a different kind of shadow inventory afoot.

Namely, all the would-be Sellers whispering to agents they know (myself included) that they’d “be open to selling if they could net $ ______” for their home.

The catch?

Their price is invariably at least 20% above prevailing prices.

I chalk it up as a side effect of housing’s (very) long-running bull market . . . 🙂

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

Leave a Reply