Things are looking up in the housing market. People are starting to buy houses again. Mortgage rates are at an all-time low and there's lots of inventory. Or is there?

Many feared that millions of homes in foreclosure but not yet on the market would derail the housing recovery. But what ever happened to the "shadow inventory," as it's known?

Slightly stronger pre-loved home sales made 2011 a better year for realtors, but a “shadow inventory” still lurks.