After improving for the first time in two years, the supply of distressed properties fell again.
In the second quarter, the supply of distressed residential properties fell to 47 months. It was the first time since mid-2009 that the number of months was lower.
In the third quarter, the supply fell to 45 months, Standard & Poor’s Ratings Service reported Tuesday.
That worked out to $384 billion in non-agency residential loans. Three months earlier, the inventory was $405 billion.
“While this number declined for the second straight quarter, it only marks a two-month improvement since the second quarter of 2011 and is still three months longer than our estimate a year ago,” the New York-based ratings firm said.
S&P Managing Director of Global Surveillance Analytics Diane Westerback noted in the announcement that the latest data suggests that the amount of time needed to clear the shadow inventory will continue to decline over the next year “assuming national liquidation rates do not decline abruptly.”
