According to CoreLogic, a property information service, in January 2011 shadow inventory has dropped to 1.8 million. One year ago this inventory was at 2.0 million units for a nine months’ supply. Currently, 445,000 of these units are in some stage of foreclosure.

Shadow inventory refers to the pending supply of real estate. It includes distressed properties, homes in foreclosure, and real estate owned properties. Some of this real estate can be short sold, but only a limited number can be eliminated from the shadow supply. This inventory is generally not included in unsold inventory data collection, so it creates uncertainty about the best time to buy or sell on the market.

My sources say it's much higher. My attorney friend says that she is sworn to secrecy and can't talk to the media.  The foreclosures will be starting now and the properties will be coming on the market by Spring 2012.