The real estate market recovered from 2008 and I think I am starting to recover too. I thought it might be interesting to compare current absorption rates with those of a decade ago. I used to publish absorption rates monthly.
Absorption rates are a calculation of how long it would take for all of the homes on the market to be bought, assuming home sales continue at the current rate and no more homes are listed.
The absorption rate also helps determine how long it might take to sell a home and if we are in a buyer’s market or a seller’s market. In a balanced market absorption rates are at about 6 months. More than six months is a seller’s market. Less than six months is a buyer’s market.
Here are the numbers for October 2008 – a strong buyer’s market
Anoka County 6.7 Months
Carver County 8.2 Months
Dakota County 7.1 Months
Hennepin County 6.8 Months
Ramsey County 6.4 Months
Scott County 8.4 Months
Washington County 7.8 Months
Here are the numbers for October 2018 – a Seller’s market
Anoka County 1.7 Months
Carver County 2.6 Months
Dakota County 1.7 Months
Hennepin County 2.0 Months
Ramsey County 1.6 Months
Scott County 2.6 Months
Washington County 2.4 Months
If homeowners stop putting their houses on the market all of the houses that are on the market in St. Paul will be sold in 1.7 months.
Last month the homes that sold in St. Paul were on the market for an average of 35 days. In September of 2008, the average was 172.