One of the biggest myths floating around the real estate sphere is that of the “shadow inventory.” Proponents of this myth believe there is a large inventory of homes, either empty or repossessed, waiting to enter the market. This idea is especially false in markets that are functioning as they should be, i.e. markets where homes that are for sale are for sale. What is perpetuating the idea of the shadow inventory? Some experts in the real estate industry believe that banks and mortgage companies are holding up the foreclosure of a large number of homes. As a result of this so-called hold-up, there are hundreds or maybe thousands of distressed homes waiting to flood the market. However, banks, such as Wells Fargo, and investment firms, such as Barclays Capital, have denied and debunked the existence of the shadow inventory. In fact, in the third quarter of...