I remain pessimistic about the short- and medium-term prospects for housing prices and construction, but there’s good news in CoreLogic’s data released today: CoreLogic Reports Shadow Inventory Continues to Decline.

This doesn’t mean that we’ll work our way through the foreclosure crisis soon, but the speed of distressed sales continues to surpass the speed with which homes are being added to the foreclosure pipeline.

Highlights from the report:

The shadow inventory of residential properties as of April 2011 fell to 1.7 million units, or five months’ worth of supply, down from 1.9 million units, also five months’ supply, as compared to April 2010.

Of the 1.7 million current shadow inventory supply, 790,000 units are seriously delinquent (2.6 months’ supply), 440,000 are in some stage of foreclosure (1.4 months’ supply) and 440,000 are already in REO (1.4 months’ supply).

The shadow inventory peaked in January 2010 at 2 million units, 8.5 months’ supply, and stands 18 percent lower than the peak as of April 2011.

The total shadow and visible inventory was 5.7 million units in April 2011, down from 6.2 million units a year ago. The decline occurred in both the visible and shadow inventories. The shadow inventory accounts for 29 percent of the combined shadow and visible inventories.

And there’s this key bit of grim data, emphasis added: “In addition to the current shadow inventory, there are 2 million current negative equity loans that are more than 50 percent or $150,000 “upside down.” These current but underwater loans have increased risk of entering the shadow inventory if the owners’ ability to pay is impaired while significantly underwater.”

Here’s what all this looks like in the graph accompanying CoreLogic’s press release:

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