Growing shadow inventory of foreclosed homes driving up prices in Florida

By Kimberly Miller

Palm Beach Post Staff Writer

There’s blight at the corner of Happiness Street and Rainbow Avenue in suburban West Palm Beach.

Despite the sunny names in a neighborhood where residents also live on Faith and Pot o’ Gold, two homes sit vacant, burned out, boarded up and part of a growing shadow inventory of foreclosed homes in Florida.

Defined as homes in the foreclosure process or bank repossessed but not listed for sale, the properties are a boon and bane to real estate. They offer the tease of more inventory in a property-starved market, but can also can deteriorate, hurting neighborhoods and threatening to cut sale prices if too many rundown homes go up for sale at once.

Palm Beach County’s shadow inventory increased 78 percent from the first quarter of 2012 to a current measure of 25,702 homes, according to a new report from the Irvine, Calif.-based RealtyTrac.

Statewide, the increase was even higher, leaping 82 percent from 175,707 to 319,147. The hike puts Florida in second place for the biggest shadow inventory increase in the country, behind New York’s 129 percent. New Jersey had the third highest increase in shadow inventory at 49 percent.

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