Sharp Drop for the Second Month in a Row
As we pass the midway point of tearing another sheet off the 2012 calendar we are heading straight into the spring buying season here in Southern Florida. The current metrics surrounding the continued improvement we have seen for well over a year are as interesting as ever; foreclosures remain lower than expected, interest rates have made a move to the upside and finding well priced properties is many segments remains a difficult task.
Monthly we take a look in this column at the absorption rates in 5 communities and the trend of that metric is a very important sign as to the current strength of sales when compared to current inventory. The lower the absorption rate the stronger the market favoring sellers and the higher it goes shows the market weakening and favoring buyers. For a complete understanding of the absorption rate and how it effects your property it should be analyzed in relationship to similar properties. While we track a city wide number of all property types it is important to understand that comparing one segment to another in the same city will yield dramatically different results. For instance in Jupiter a single family home in a community like Abacoa will have a far lower absorption rate when comparing it to a single family home in a private equity golf community like The Loxahatchee Club.
This month it is great to report that a majority of our reporting municipalities have seen a decrease in the absorption rate over the last month and here are how things shake out for our March report;
Hobe Sound - 12.20 months down form 14.21
Tequesta - 12.56 months down from 14.54
Jupiter - 12.52 months down from 12.80
Palm Beach Gardens - 14.85 months up from 13.03
Juno Beach - 36.25 months up from 14.00
Hobe Sound wraps up the monthly absorption rate reports with a strong showing. A sharp increase in sales coupled with slight increase in inventory brought the Hobe Sound absorption rate to 12.20 months over a 2 month improvement from the 14.21 reported one month ago. We also fall far below both our 12-month average which currently sits at 13.485 months and year ago numbers which stood at 17.89 months. As the second monthly decline in a row, and the 4th in 5 months, the chart is starting to point to a reversal in the trend which is very good news indeed.
As an agent who takes great pride in providing my clients all the information they need to make knowledgable decisions this is just one tool used on a daily basis in my business. Perhaps no other information is as valuable when making decisions on many fronts. If a client is looking for the best value we will be drawn to neighborhoods with the highest absorption rates. Another client may be evaluating the current pricing on their listing and there is probably no more important factor they should be considering than the current absorption rate in their neighborhood and what the trend line is doing.
Overall another strong month of recovery with a nice average decrease in absorption rates throughout the area.
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