If you've ever tried to get information on foreclosures that are not on the market before you know how difficult it can be. A realtor can get some of the information for you or you can buy a subscription to a special database. But just yesterday Zillow introduced a new feature on their Web site that allows the average Jane (or Joe) to see what foreclosures are out there. This gives us unprecedented insight into where all the shadow inventory is.
According to Spencer Rascoff, Zillow's CEO:
This is another tremendous step forward in consumer empowerment. Zillow is taking information that was really only available to a select group – in this case, savvy investors – and making it more easily available to interested home buyers. What's more, bringing this information to light, and taking this inventory out of the shadows, can help bring these homes to market faster than ever before.
I don't know about that last part. Good luck trying to buy any of these. If a bank owns a property you will never be able to work your way through their bureaucracy and get to a knowledgeable human that cares and has any interest in deviating from their established practice. Banks will sell no property before its time. And if it's not bank owned the seller has already received dozens of solicitations from realtors who want to help them do a short sale. And auctions are really for buyers who really know what they are doing.
So as of right this minute Zillow lists 14,026 pre-market properties in some stage of foreclosure, of which 11,147 are pre-foreclosure and 2,870 are already foreclosed (bank owned). Yeah, that doesn't add up so there must be some minor bugs in the system or data nuances. In addition, the data must be fairly dynamic because there were 14,033 properties a few minutes ago.
One other thing...as several people have pointed out in other forums it's not at all clear how Zillow will know when a foreclosure has been avoided. In other words they can see that the foreclosure process has started on a property but how will they know if and when the homeowner renegotiates the terms of their mortgage or otherwise bring their account up to date? I would expect the data to overstate the true inventory of homes in some stage of foreclosure for precisely this reason.
So, like everyone else, the first thing I do is check my own West Town neighborhood - East Village/ Ukranian Village - to see where all the foreclosures are - and there are a lot:
Having this free information out there must be causing conniptions (can't believe I spelled that right on the first try) for the likes of RealtyTrac and the Illinois Foreclosure Listing Service who make their money off of subscriptions but this is what competition is all about. Life just keeps getting better.