Phoenix area submarket absorption rates
by Kaushik Sirkar, Chandler AZ REALTOR
Chandler Arizona Real Estate
I admit it. I'm not the first to blog about absorption rates. Heck, I'm not the first one to blog about them locally. I first saw Jonathan Dalton blogging about this topic. But I do find this topic very interesting, so I'm going to start talking about it also!
What is an absorption rate? Effectively it quanitifies the supply of homes (often discussed in months of supply). It suggests that based on the current rate of sales and the amount of inventory on the market, it should take X timeframe to completely rid the shelves of inventory (of course, assuming no new listings present themselves!!)
That being said, (drumroll please), I present the statistics for some of the major Phoenix metropolitan area submarkets for the month of May (courtesty of ARMLS)....
May | | | |
| Active | Sold | Months of Supply |
Ahwatukee | 138 | 11 | 12.5 |
Chandler | 2704 | 309 | 8.8 |
Gilbert | 2647 | 277 | 9.6 |
Glendale | 2527 | 271 | 9.3 |
Maricopa | 1026 | 55 | 18.7 |
Mesa | 4458 | 556 | 8.0 |
Paradise Valley | 320 | 27 | 11.9 |
Peoria | 2185 | 220 | 9.9 |
Phoenix | 11780 | 1210 | 9.7 |
Queen Creek | 2109 | 130 | 16.2 |
Scottsdale | 5387 | 556 | 9.7 |
Tempe | 881 | 151 | 5.8 |
What does all this mean? Well, homes are selling fastest in Tempe. Slowest in places like Maricopa and Queen Creek. Why does Tempe have the most 'brisk' of home sales currently? Couple of reasons. Its landlocked, centrally located and very little new construction. Maricopa and Queen Creek. Why are they at the other end of the spectrum? True, as they are more on the periphery of the metro area means there is likely a little less demand to live there (of course lower prices should counter that, right???). Also, data from ARMLS for the most part covers only the resale market. I would suggest that a large portion, in some cases the majority, of home purchases/transactions in places like Maricopa/Queen Creek are of the new home/spec home variety. Not just because of the abundance of new construction, but also the huge builder incentives. As a frame of reference, consider that historically the 'average' supply of homes in the Phoenix metropolitan area has been on the order of about 4 months.
Data is data, statistics are statistics so take it all as you will. I find this interesting and plan to keep tracking it on a monthly basis. Thanks Jonathan!
Thanks for Reading :)
Kaushik Sirkar, Chandler AZ REALTOR
http://www.homesphx.com
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