I finally finished the absorption rates for the first quarter. Not that it was difficult. I had already done the hard part. I just needed to cut and paste but lately I have so much going on, I can’t keep up with the blog.
Generally, the inventory has continued to decline. Look at Foster City – whatever slow down they had going on over there is obviously taken a turn in the other direction. From 10 to 2 months’ inventory is huge.
The inventory decline in San Mateo doesn’t show what’s really going on in some parts of the market, but San Mateo isn’t the only city with declining inventory. Belmont, Brisbane, and Pacifica are also showing decreasing housing inventory.
|East Palo Alto||1.3||1.6||1.4||2.4|
|Half Moon Bay||7.6||11||7.5||16|
|South San Francisco||2.5||1.7||1.4||1|
The absorption rate is a quick way to see if the number of homes for sale in San Mateo County is going up or down. It’s just one of the statistics used to evaluate pricing.
What you’re looking at is how many months’ inventory there is on the market. The assumption is that it will take X number of months for all of the houses currently on the market to sell. More inventory = longer to sell.
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.