Absorption Rate Changes

You may have heard the real estate market is changing. While this is true, if you have read any articles that say the sky is falling please understand that scary stories get you to click on news websites, and that’s what they are counting on!

I have tracked the Fort Collins absorption rate since 2011 and keep a running spreadsheet on a quarterly basis of inventory levels and the rate of absorption (the rate at which available homes are sold in a specific real estate market during a given time period. It is calculated by dividing the average number of sales per month by the total number of available homes). The good news for sellers is that inventory is still historically VERY low, it was at only 1.81 months and a balanced market is 6 months. The interesting number was the much lower absorption rate of 55%. We haven’t seen numbers that low on a consistent basis since the end of 2013 heading in to 2014. All this means is that homes are not being “absorbed” in to the market as quickly, so that could mean some great opportunities for buyers. With increasing interest rates and appreciation still on the horizon, now could be a good time to find a home and potentially not even have to compete with 10 other offers (Buyers should be cheering for that right now!).

If you have any questions on how this data could affect your decision to buy or sell, just give me a call or shoot me an email. I’d be happy to take you to coffee or lunch to discuss!

Posted on October 29, 2018 at 1:51 pm
Paul Hunter | Category: About the area, Buyer Tips, Fort Collins Real Estate, Investment, Real Estate, Seller Tips | Tagged , , , , ,

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