The housing market finally appears to be on the mend, but there are still roadblocks. A key issue is the “shadow” inventory of housing that is unoccupied but has not yet been released into the market, either as a rental property or sale listing. This is of concern particularly in so-called judicial foreclosure states, which require a foreclosure to be processed through the courts.

Once this shadow inventory is released into the market, it might bring down prices in affected states, perhaps reversing some recent increases in home prices.

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