This chart covers the past year's data for San Diego County foreclosure filings and the ultimate result or outcome of the filing. The yellow line or 'sold to third party' represents those homes sold on the courthouse steps, usually to investors, while the red line represents those foreclosed homes that the bank now holds on their balance sheet and ultimately will be listed with a local Real Estate agent as an REO. This is where the so called 'shadow inventory' hides. After the bank repos the home but before they put it on the market as a distressed sale.
As you can see their has been a 23% decrease in the foreclosed homes sold to third parties from the prior year but up from December 2010 and Nov 200. The result being less 'fix and flips' on the market.
The gray line shows the foreclosures that were canceled for various reasons.