Absorption rates are calculated from the total current inventory and the number of monthly contracts resulting in the average months it takes to sell or absorb the current inventory of homes. Of course, some homes will sell quickly, and some may not sell at all. The absorption rates provide a measure of the temperature of the market.
As of this writing, New Jersey's statewide absorption rate stands at 14.9 months, up from 12 months at this time last year. Morris County and Randolph's rates are 11.8 and 11.7 respectively, better than New Jersey overall. Click on the graph below to enlarge to see details.
The increase in absorption rates in late 2008 and 2009 follows the collapse financial markets at the end of 2008 and also illustrates the steadying effect of the tax incentives offered by the Federal government as the rate fell through April of last year.
As contracts decreased following the expiration of the Home Buyer Tax Credit, absorption rate rose again. The increase in contracts at the end of last year brought the rate down slightly from last fall.
As a comparison, absorption rates the height of the real estate market were between 4 and 5 months, which is considered by real estate analysts to be a healthy market.
Beating the Odds:
Changes in the absorption rate may not put a seller at the end of a line where they wait for 10 months until their turn comes to sell their house. Aggressive pricing, market exposure follow-up puts sellers at the front of the line…where homes sell quickly at or near the asking price. With 20+ years of experience in real estate and marketing, I can make that happen for you.
Feel free to contact me with any questions at andrew.mensch@cbmoves.com or call me directly at 862.432.2771.
0 comments:
Post a Comment