I’ve been reporting on the absorption rates for several months now but I haven’t seen anything this dramatic in the numbers; many, many cities are now showing the serious impact the economy is having.
Look at cities like Atherton, Foster City, Millbrae, Redwood Shores; the cities that overall have held fairly steady in their rates.
Looking back, we’ve seen the number of months’ inventory double from year to year but Atherton, Foster City, and Redwood Shores are five plus times what they were last year at the same time.
Another thing that I find so interesting is that, once again, the markets that are considered to have the “deals” show declining inventory: Daly City, South City, Pacifica.
The absorption rate doesn’t necessarily mean that it will take 18 months for a given house to sell; but that if no other homes came on the market, it could take 18 months for all of these houses to sell. It’s really a measurement; a market barometer. In some cases it’s a quite striking snapshot of where the market is at this moment.
It’ll be interesting to see the month-to-month rates. I ran them January through November 2008. So I’ll add December, January and February. Unfortunately the site won’t allow a chart that large, so if you’d like to see the results contact me directly and I’ll email it to you.
|East Palo Alto||3.4||2.8||11||1.6|
|Half Moon Bay||1||2||3.8||11|
|South San Francisco||1.5||2.5||6.9||1.7|
The absorption rate is a quick way to see the direction of San Mateo’s real estate market when compared to a previous period. You can also see if the area is a buyer or a sellers’ market.
The National Association of Realtors defines a balanced market as one is which there is 6 months of inventory. More than 6 months, it’s a buyers’ market; less is a sellers’ market.
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