My thoughts on all this "shadow inventory" talk being thrown around

Ok so I have to put up a disclosure first. I'm pulling this from First American's system called List Source. I'm new to the system so there is a possibility that I'm inputting my criteria wrong however I think I'm doing it right. Secondly I'm new to trying to get my brain around data and I could very well be looking at the wrong stuff so feel free to give me input on other aspects of public records that I might be missing. This is for Riverside County CA.

Total pieces of Real Property in Riverside County: 942,339
Total SFR’s in Riverside County: 487,000
Total SFR’s with a NOD filed: 19,000
Total SFR’s with a NTS filed: 14,500
Total SFR REO’s: 17,700
Total Distressed: 51,200
Distressed percentage of SFR housing stock: 10.51%
Months of housing supply REO's only: 5.87
Months of housing supply factoring all classes: 16.98

Per the local MLS monthly closed SFR transactions are running around 3000.

Note this data excludes any house that is a short sale where a NOD/NTS has not been filled yet. Many people claim banks are simply not filing NOD's and that is probably true in some cases however all these servicing companies/banks are not stupid as one would think and I'm inclined to believe that banks are filling NOD's in most cases because it is the first step in the process and crucial to the note holder as a back up plan if a workout/short sale fails. This is my opinion only as far as these distressed homes without a NOD filed and I could be way wrong on this one.

So looking at these data and factoring in how long it takes a home to move through the process and actually become a REO I personally don't buy into all this shadow inventory talk. We have a major problem and I don't feel we are out of the woods by any means however these numbers aren't as bad as what I was expecting all things considered.

The recession will still grind on but Riverside County unemployment has been in the double digits for a while now and all this time sales have been brisk and houses are getting multiple offers. The last few rehabs I sold all received multiple offers well into the double digits and one got over 20. I'm sure there are some agents out there writing offers on several properties for the same clients but it is hard to imagine one agent writing more then a couple/few offers with one client simultaneously. For this demand to be "fake" each agent would need to be writing just a ton simultaneous offers for each client and that is hard for me to believe. My experience, the experience of friends and feed back from agents it is obvious that any property that is in decent enough condition to be financed conventionally/FHA/VA is receiving an eyeball popping amount of offers if it is priced reasonably.

So, all in all I feel pretty good about being able to successfully sell properties and I certainly will not try to slow down. I am not going to get crazy and start raising buy prices hoping to get multiple offers however at this point I'm feeling good about the 7 houses I have in inventory and am looking forward to getting some more.

I look forward to comments from others regarding your feelings on all this Shadow Inventory talk.