Our market is sending out some mixed signals from last months statistics. Sales are up from a year ago (127 homes in 2010 vs. 112 in 2009) but the inventory also jumped a bit from the December low. Still down from a year ago (1900 in 2010 vs. 2268 in 2009).
My speculation is that we have seen a slow increase of sales prices in the lower end of the market as the demand for affordable housing (with the added benefit of tax credits from Uncle Sam) remains strong as we head towards the April 30 deadline for a contract. This has resulted in some previously frustrated sellers in placing their homes back on the market. So while sales are up, so is inventory and our absorption rate has crept up a bit. It will be very interesting to see what happens after the tax credits expire.
Overall, average prices continue to dip slightly, more from the predominate mix of sales in the lower end of the price range rather than a continuing decline of value. It appears the low to mid range of the market in Martin County bottomed out last fall as prices have held steady or even increased slightly. In the middle to upper range of homes, we are still seeing some softening of prices, as demand is relatively low for the volume of homes available.
The Definition of Absorption Rate:
Number of weeks it takes to sell the current inventory at the present rate of sales. Knowing your area's Absorption Rate, helps to track trends. Understanding the market and where it is headed is part of our job as real estate professionals. Absorption rate is NOT an exact science. Figuring it is based on the premise that one will be looking for a TREND. It is advised to consistently do the numbers each month, to be able to track a trend.
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