So, what is Absorption Rate? We have touched on it a couple of times in posts, but basically it give a hint (HINT) as to what type of market it is. The absorption rate is basically how fast homes are selling compared within a certain time frame based on available inventory.
Let's say that you have 100 homes on the market, and 50 sell in a month. Make-believe that there will be no new listings and that ALL of the homes on the market have the same desirability (is that a word? I guess it is now). We all know that there will be new listings and that the house that has the huge hole in the roof down on xyz street will probably not sell very soon, but still... In the world of absorption rate, it is a perfect real estate world. Ok, so we have 2 months of inventory. That would be nice for sellers. Well, like I said, a perfect world.
Today, we will look generally, and then specifically. You see, I have a problem with national headlines when people see the amazing market in Washington, D.C. (Washington always has an amazing market...think about the turn over and wealth)...and then they apply THAT to a town of 34,000 people in Arkansas.
OK, so first, general. The topic is residential single family homes in Garland County currently listed as ACTIVE in the Hot Springs Board of Realtors® Multiple Listing System. Today, there are 547 total listings of RSF homes countywide. In the last year... there were 781 sales. Based on some quick n dirty calculations we have around 8 mo. of inventory if no new listings came on the market, etc.
Lets get specific. Let's look at a criteria for a 3 bedroom, 2 bath home between 1500 and 1800 sq. ft. Today, there are 61 of these active listings in the county. In the last year, there were 106 sales. This comes to a 7 month inventory, roughly...meaning that the market for this 3/2 house, county wide is hotter than the average home. In a perfect world ;).
Have a great day.