Understanding Absorption Rates

Posted by Joe Manausa on Wednesday, April 16, 2008 at 11:39 AM By Joe Manausa / April 16, 2008 2 Comments

We have had quite a bit of response to yesterday's blog on absorption rates in the Tallahassee real estate market. Apparently, many people who read this blog want to see how Leon County (specifically) is doing versus the entire Tallahassee Board of Realtors Multiple Listing Service (MLS). I did a download from the Tallahassee MLS for Leon County homes that sold from April 16, 2007 through yesterday, April 15, 2008. I also pulled all of the active listings in Leon County. I also took the time to remove all of the duplicate sales and listings (the MLS has many homes that are entered more than once which skews data) to come up with the following information:

There is a whole year's supply of homes across all price ranges in the Tallahassee real estate market (Leon County only). Our twelve-month absorption rate has dropped to 271 homes per month in Leon County. While this is better than the surrounding counties, it is still not that exciting. I suspect that all the attention that real estate is receiving from the media is slowing home sales even more so than the post-boom recovery that was needed. If this is true, we can expect a nice recovery-upswing when the media gets bored with the real estate market.

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Discussion

#1 By Joe Manausa at 7/11/2017 3:47 AM

Great question Steven. Short answer is the statistics would look worse. I suspect even without seasonality they would look worse.

Unfortunately, you have to use the entire year. More sales occur from March through August than occur from September through February each year.

#2 By Steven at 7/11/2017 3:47 AM

Thanks for the chart. It's very informative.

How different is that chart if you change the parameter to let's say the last six months rather than the last year?

I ask because, as I understand it, the market really went South after August 2007, when the availability of easy mortgages started to dry up.

If you used statistics from the past six month, which only includes the current tough credit market, do the statistics look much worse?

Understanding Absorption Rates

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