Click on the picture above to see an enlarged version.
As of 10/27/08, the Absorption Rate for Single Family homes was 7.61 months and Condos/Townhomes was 7.67 months.
Absorption Rate projects out into the future the amount of time (in months) it will take to sell a typical home if it come into the market place now. Simply put, it is a formula which looks at the numbers of homes sold in a designated area in the past (typically a full year) and compares those against the number of homes that are unsold in the marketplace (right now), to come up with the projection. It is perhaps the single most important formula in making home buying/selling decisions, yet only a handful of Realtors seem to discuss it. I hope you find this information useful. It will be updated on a monthly basis.
According to National Association of Realtors (NAR), the real estate market is defined as follows:
More than 6 months of supply = Buyer's Market
6 months of supply = Balanced Market
Less than 6 month of supply = Seller's Market
Steve Mun, Silicon Valley Realtor
www.stevemungroup.com
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