Absorption Rates in Real Estate + the Lehigh Valley

spongebob

by Ellen Shaughnessy, September 3, 2019 FreeBridgeRealty.com

The ABSORPTION RATE – Is the rate at which homes are selling in a specific area.

There are 3 pieces of information you will need to find absorption rate:

  1. The specific time frame
  2. The number of sold homes during that time frame
  3. The number of active homes right now

You can customize this rate based on the area and price-range too, if you want to get a more specific idea of how quickly your property might sell. So on Sept. 3 we have now had 246 days in 2019. Let’s have a look at the absorption rate for the year so far in a few local counties:

Rate of homes sold  = the number of days/ number of homes sold.
I’m going to have a look at the $175,000-250,000 segment. Since Jan. 1 – there were 998 residences sold in this range. In 246 days, 998 sold.

So it’s a .24649 rate of selling homes; 1 residence in this price range is sold every .24649 days.
Right now at this moment that I search, there are 198 currently available in this same range.

Absorption rate = # of active available homes in the range * rate of homes sold… so 198 active availables * .24649 = 48.8 days  or 1.62 months. If market conditions remain stable, it will take 1.62 months to sell off the current inventory of houses in this county in the $175-250,000 price range.

I tried a fe Northampton County PA ‘Absorption Rate rice range slices’, to see where there is an absorption rate fall-off. With much fewer properties in the upper tiers this data may not be super precise, but it does appear that in the $600,s there is a significant extended amount of inventory to sell, vs. lower price ranges right now in Northampton County.

Check back – over the next few days, I’m going to add a glimpse of Warren County, Bucks County, Hunderdon County too – and will then compare  these real estate markets over the last few years.

~ Ellen freebridgerealty.com

 

 

 

 

Leave a Comment

Your email address will not be published.