DQ jumped on trying to determine shadow inventory bandwagon as well with this quote:
Of the homes foreclosed on statewide in an 18-month period ending this July, about 82 percent have re-sold on the open market, while 18 percent, or more than 57,000 homes, have not. Of those that have not re-sold, it cannot be determined from public records what portion is currently being marketed for sale, as opposed to, among other things, being used as rentals or being left vacant and not for sale. Over the past year California buyers have snapped up an average of nearly 18,000 foreclosure resales a month.
Now 57,000 might sound like a lot but shadow inventory is about what isn't currently on the MLS being marketed and if it averages a month or two to turn around the home after trustee sale (call it 45 days) you can assume about half of those are on the MLS (either active, contingent, pending, closed but not yet recorded) and the other half are mostly in the pre-list phase. Meaning less than a month and a half of inventory at current absorption rates sitting on the sidelines yet to be marketed. Certainly not a flood waiting to be unleashed. Shadow inventory is the massive amount of homeowner in default not being foreclosed on.. it is NOT a bunch of foreclosed homes yet to be marketed.
You can read the DQ press release here.