Absorption rates are a calculation of how long it will take for all the homes on the market to be sold, or absorbed, at the current rate of sales. .
The data used came from the RMLS, (MLS) and is deemed reliable but not guaranteed. It doesn't come with a warranty either. This covers what is referred to as the 7 county metro area not to be confused with the 13 county metro are which covers the same area, plus six more counties.
I usually use paper towels to absorb the excess, last month I used Kleenex, next month this month I think toilet paper will do the job. There is not nearly as much inventory to absorb as there used to be, if this keeps up maybe next month q-tips or cotton balls will do the job. A year or so ago I used a picture of a wet/dry vac in my post, things have changed since then.
Anoka County - 7 Months
Carver County - 11 Months
Dakota County -7 Months
Hennepin County – 7 Months
Ramsey County – 6 Months
Scott County – 8 Months
Washington – 9 Months
Those homes on the market are being absorbed more quickly every month. The national news media likes to say that there are a lot of homes on the market. Maybe but there are almost half as many in the metro area as there were a year ago. Buyers are absorbing the homes at a faster rate and there are fewer homes on the market. Will someone please let the media that the number of homes on the market had declined? There is about a three month lag in reporting real estate trends.Home sales are up from a year ago and in February half of all local home sales were lender mediated which means they were shot sales of foreclosures.
To see absorption rates and housing numbers from prior months see the Local Market Conditions & home prices category
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interesting post. an agent who writes for us was saying she sees the same thing in thousand oaks, calif, as a lot of the banked-owned property gets sold off.
however, as these kinds of stats get more play in the media, i imagine we’ll see a lot more of the shadow inventory coming back onto the market, which might drive the absorption rates up again?
Tim – I have a theory but it is just a theory and that is that many, many, listings . . expired or were canceled last year. Some were re-listed and sold but most were not. I think that there is pent up demand and that sellers will start putting them back on the market and no I don’t think they can be absorbed very quickly. So yes I think absorption rates will go up again but they may reach the “Q-tip” level before they do.
Teresa….well said! Love the papertowel to the toilet paper comparison. You could use to consider the inventory, or you could use it to consider the QUAILTY of the inventory. Savy buyers are going to “cherry pick” the good stuff, and leave the leftovers for those who wait. I think the question remains as to how many homes have YET to hit the market. WE had a record number of foreclosures this month in Fulton County (Atlanta) so that inventory has yet to make it to the marketplace. Sigh!
Even the gurus will agree with what is being said here. I am glad I found it.