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:
- The specific time frame
- The number of sold homes during that time frame
- 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