The nation's shadow inventory dropped to 1.7 million residential units in April, down 10.5% from a year earlier and representing a five-month supply, CoreLogic (CLGX) said Wednesday. The decline from a year ago is due to fewer new delinquencies and the high level of distressed sales, which helped reduce the number of outstanding distressed loans, the Santa Ana, Calif.-based data company said. "The shadow inventory has declined by nearly one-fifth since it peaked in early 2010, in large part due to a reduced flow of newly delinquent loans in recent months," according to said Mark Fleming, chief economist for CoreLogic. "However, it will probably take several years for the shadow inventory to be absorbed given the long timelines in processing and completing foreclosures." CoreLogic estimates current shadow inventory, also known as pending supply, by calculating the number of distressed properties not listed on multiple listing services that are at least 90-days delinquent, in foreclosure or in real estate-owned status. Transition rates of delinquency to foreclosure and foreclosure to REO are used to identify the distressed nonlisted properties most likely to become REO properties. Properties not yet delinquent but may become delinquent aren't included in CoreLogic's estimate. Of the 1.7 million residential units that make up the shadow inventory, 790,000 units are seriously delinquent — a 2.6-month supply, and another 440,000 are in some stage of foreclosure — a 1.4-month supply. Another 440,000 are already in REO, CoreLogic said. The nation's shadow inventory peaked in January 2010 at 2 million units, representing 8.5-month supply. The total shadow and visible inventory was 5.7 million units in April, down from 6.2 million units a year ago. The  shadow inventory accounts for 29% of available properties. In addition to the current shadow inventory, there are 2 million home loans with negative equity of more than 50% or $150,000. "These current but underwater loans have increased risk of entering the shadow inventory if the owners’ ability to pay is impaired while significantly underwater," CoreLogic said. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.