Is it a Buyer’s Market or Seller’s Market? Understanding Murrieta CA Absorption Rates.
How can you determine whether it’s a buyer’s market or a seller’s market? By looking at housing market absorption rates.
The absorption rate refers to the number of months it will take to sell all the homes currently listed for sale. For example, if it will take six months to sell the current inventory of homes, then the absorption rate is six months.
When the absorption rate is less than five months, it’s considered a seller’s market. When the absorption rate is more than seven months, it’s a buyer’s market. And when the absorption rate is between five and seven months, it’s a balanced, or stable market.
CALCULATING ABSORPTION RATES
The absorption rate is calculated by dividing the number of homes for sale by the number of homes sold. For example, if the number of homes currently for sale is 350 and the number of homes sold on average per month is 100, then the absorption rate is 350 / 100 = 3.5 months.
ABSORPTION RATE TRENDS
By comparing the three, six, and twelve month values, the absorption rate’s trend is determined. If the three month absorption rate is higher than the six month rate, and the six month rate is higher than the 12 month rate, then the absorption rate is trending upward. But if the three month absorption rate is lower than the six month rate, and the six month rate is lower than the 12 month rate, then the absorption rate is trending downward.
Absorption rate trends help buyers and sellers determine a realistic value for the home. When absorption rates are trending upward, then homes are taking longer to sell, which puts downward pressure on housing prices. However, when absorption rates are trending downward, then homes are selling faster, which puts upward pressure on housing prices.
Here are the latest absorption rates for Murrieta Single Family Homes.
Here are the latest absorption rates for Murrieta Condos & Townhomes.
Copyright ©2011 Bill Burchard
Content provided by Bill Burchard; 3B Realty
I specialize in Murrieta homes for sale, foreclosures (Bank REO‘s), and short sales. Serving the real estate needs of Murrieta home buyers and home sellers.
Bill Burchard, Broker, REALTOR®, LIC: 01864774
Cell: 951-347-3818 / Email: Bill@my3BRealty.com
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More about me: I’m Bill Burchard, a real estate broker licensed by the California Department of Real Estate (Lic: 01864774). I specialize in Murrieta homes for sale, including bank foreclosures (REO properties) and short sales. I also specialize in Greer Ranch homes for sale, the community where I live. I serve the real estate needs of both home buyers and home sellers in Greer Ranch and in Murrieta, CA.
If you want more information about buying or selling Murrieta real estate, or if you want more information about my Greer Ranch Community (including properties for sale), please contact me, Bill the Murrieta Broker, by phone or text at (951) 347-3818, or email me at Bill@my3BRealty.com.