The housing market’s shadow inventory continues to be the real unknown, and the real threat to recovery. It’s a scary thing, and helps paint the true picture of what is going on with real estate. Listen to this. The government doesn’t report on how many homes are held by the banks on their books or in private label securities. Since they are in control of Freddie Mac and Fannie Mae, we can at least find out what’s the true amount there. Together, Freddie and Fannie and FHA hold 236,338 homes. But big banks report their REOs in quarterly earnings reports, and only as value of properties, not actual number of properties. That said, Thomas Lawler, economist and housing consultant, estimates that banks own $14.5 billion worth of REOs, or about 97,000 properties. Add that to private label possessions and the total number climbs to almost 600,000. That’s a far cry from the 546,000 homes the NAR reported sold in June. There’s a four month supply of foreclosed homes alone.