What is it with this country and our morbid curiosity for the unknown, the mysterious and the enigmatic? We’re fascinated with space aliens, ghosts, zombies, vampires, a lone gunman on the grassy knoll, and Adele. Okay, maybe it’s just me that’s fascinated with Adele. It’s just that I’ve never heard a woman sing like that before. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free I guess this also explains why the mainstream media, bloggers and real estate pundits love talking about shadow inventory. It sounds so, I don’t know, shadowy. This love affair is so insatiable that the definition of shadow inventory is now regularly expanded so the phenomenon can be kept alive. When I first heard the term it was used to describe those houses owned by the bank that weren’t for sale on the multiple listing service. The shadow inventory definition was changed later to include those homes in the foreclosure process. When the number of homes in foreclosure started to dwindle all delinquent mortgages not yet in foreclosure were added to the list. Investopedia.com includes homes that owners are delaying putting on the market until prices improve in their definition of shadow inventory. Where does it end? Tom Ruff, a Phoenix housing expert with TheInformationMarket.com once said, “there are no shadows, we know where all the houses are.” He informed me that as of today there are 17,554 homes in foreclosure in greater-Phoenix. Okay, so that’s one mystery solved. His firm also tracks trustee’s deeds so he knows exactly how many homes in foreclosure end up in the hands of third party investors and banks. Ruff knows when those homes go on the multiple listing service. Another mystery solved. As for delinquent mortgages not yet in foreclosure, CoreLogic tracks delinquency rates in most major markets so that suspense is gone (in case you’re wondering, 6.86% of homeowners in greater-Phoenix are 90 days or more past due. The national average is 7.07%). It’s easy to see why some would say that houses owned by the bank but not for sale on the multiple listing service are in the shadows. But the definition should stop there. Not to be a drama killer but only a tiny, miniscule percentage of those homes in the foreclosure process and delinquent mortgages not yet in foreclosure will ever make it to auction. Most will be modified, brought current or paid off long before the foreclosure takes place. And as for those homes that owners are delaying putting on the market until prices improve? Give me a break. How many of those can there be? And what are the odds that every one of them will put their houses on the market at the exact same time? Professor Michael Orr with the Arizona State University Real Estate Studies department summed up the shadow inventory debate here in Phoenix best in a recent radio interview: “It’s a bit like the Y2K problem, everyone was really scared about that, but when [the year 2000]came around, nothing happened.” Is there a shadow inventory problem in your market? Maybe. But there’s probably an expert in your area that can tell you what Tom Ruff told me about Phoenix. Find out the truth. Don’t let the shadow inventory paranoia keep you from investing in real estate. That investment property you buy to fix and flip or buy and hold has a better chance of being haunted or invaded by space aliens than it does of dropping in value if and when those mysterious houses finally emerge from the shadows.