Since the beginning of the housing crisis in 2008 housing experts have cited concern over the "Shadow Inventory" and the pitfalls it could present to any recovery of the housing market.  Back then, as every month brought news of mounting delinquencies, rising unemployment, and pending adjustments to adjustable and teaser rate mortgages the shadow inventory had a particular definition; the number of homes with mortgages that are 90 or more days delinquent and that have a reasonable likelihood of ultimately being foreclosed and becoming bank-owned real estate even though they are not yet publicly listed for sale.
While lenders and servicers are still trying to rid themselves of backlogs of REO and there are still concerns over homes which may be held off the market for various reasons, the cry for months has been that there are not enough homes for sale.  Sales, appeared to have been hampered by a lack of inventory as new home builders cut back on construction and current homeowners have deferred moving, each awaiting a better market. 
The number of homes thought to be in the shadow inventory has dropped from 3 million at the peak in January 2010 to about 1.7 million in January of this year.  Mark Fleming, CoreLogic's chief economist, said recently that the traditional view of the shadow inventory doesn't tell the whole story anymore and he puts forth two new ways of looking at how a different version of shadow inventory may still be holding back recovery.

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Giving New Meaning to Shadow Inventory