More homes are poised to hit the market -- latimes.com

More homes are poised to hit the market -- latimes.com: "First American estimated that the inventory not yet on the market constituted a 3.3-month supply at the end of the third quarter, up from 2.4 months a year earlier. The number of homes for sale was 3.8 million, a 7.8-month supply at the current sales pace, First American said. That's down from 4.7 million, or a 10.1-month supply, a year earlier.

Stuart Gabriel, director of UCLA's Ziman Center for Real Estate, laid out a troubling scenario that could play out if shadow properties do hit the market early next year: a contagion effect in which waves of foreclosures beget more, taking down the values of entire neighborhoods. Concern over such an outcome could cause sellers and lenders to act more cautiously, slowing the pace at which they take back troubled properties, he said.

'Some are strategically holding property off the market and are only putting it back on in dribs and drabs,' he said. 'They're playing this interesting game where, on one hand, they need to liquidate these properties, but they can't create a downward implosion in prices that will come back and bite them even harder.'"