Many realtors track absorption rates to determine a trend in the market.  Ideally this should be done regularly so you can see if you are dealing with a buyers market or a sellers market and where the trend is headed.

The actual definition is:  The number of weeks (or in my example, months) it takes to sell the current inventory at the present rate of sales

For consumers unfamiliar with the term or how this is calculated, it is actually quite simple.  You divide the current inventory of homes by the previous months actual sales.

Many agents will give you an across the board figure.  I, however, prefer to break it down even more.  It is my experience, people looking for a vacation villa are not really concerned with how many golf course properties have sold.  It is irrelevant to them.

So I tend to break things down even further.  Let's take Sun City Grand for example, to date.  We currently have 38 golf course homes on the market.  Last month we sold 7.  This gives us an absorption rate of 5.42 or in plain english, it will take aprox. 5.42 months to sell the current inventory.

For non-golf course single family homes, we have 200 homes currently on the market and 31 sold in the last month.  That means it will take aprox. 6.45 months to sell the current inventory.

Now let's look at the condos... There are currently 14 on the market and only 1 (one) sold in the last month.  That means there is a 14 MONTH SUPPLY!  If I had included these numbers in the total it would have skewed the picture somewhat.

Sun City West currently has an aproximately 6.85 month supply of golf course homes and only a 3.43 month supply of single family non-golf course homes.  Arizona Traditions is running at a 7 month supply of golf course homes and a 6.14 month supply of non-golf course homes.

All that being said, with all the negative publicity surrounding our local real estate market I am constantly trying to educate buyers about the health of many of our active adult communities.  Market conditions are REGIONAL and can even be quite different in a relatively small geographical space.

A market is generally considered "normal" when you have a six month supply of homes on the market.  Anything above that number would be considered more of a buyers market and anything less would be considered a sellers market.

Look at the numbers listed above.  Condos aside, the Sun City Grand market is relatively healthy.  The same could be said for Sun City West even though prices have adjusted from the inflated prices of two or three years ago.  Anyone that bought a home in 2004 or prior still has great equity in their home.  The same cannot be said for some of the other area active adult communities, unfortunately.

Here are some of those figures:

Corte Bella golf course homes - 16.5 month supply
Corte Bella non-golf course homes - 15.16 month supply

Trilogy golf course homes - 16 month supply of resale homes
Trilogy non-golf course homes - 6.71 month supply of resale homes

PebbleCreek non-golf course homes - 7.5 month supply of resale homes
PebbleCreek golf course homes (much better) - 4.25 month supply of resale homes

Sun City Festival golf course & non-golf course homes - hard to say because there were NO resales in the last month

I should note that Trilogy @ Vistanci, PebbleCreek, and especially Sun City Festival are affected by the incentives the builders are giving away for new construction.  It is very difficult to compete with them and something I caution clients about before they purchase in one of these communities, in the current market.

Also - these figures are meant to give you an idea of the market.  As with all statistics, they are only as good as the data provided by the individual listing agents.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~