May 2008

There are 2 blog entries for May 2008.

Ada County Statistics, Single Family Homes, April 2008

INVENTORY

As to be expected in the spring, inventory has been increasing and averaged around 4931 homes for sale (April 2007 had 4656).  This increase is from existing homes coming on the market.  New construction inventory levels are actually down from a year ago year- 1286 April '08 compared to 1727 April '07. Overall absorption rates in April were 10.9 months, existing homes 10.4 months, and new construction homes 12.4 months.  A balanced market is usually represented with absorption rates around 6 months.

PRICES

Inventory levels are still too high for a balanced market.  The excess inventory is part of the reason we have been seeing a softening in prices. The median home price in Ada

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Absorption rates give you an idea of the supply and demand in a given market for a specific time period.  It is easily calculated for a given month by looking at the number of homes for sale and dividing how many actually sold that month.

For example: If there are 5000 homes for sale and 500 sold in one month.  The absorption rate would be 10months (5000 divided by 500).

A balanced market (or equilibrium area) is usually considered to be around a 5-7 month absorption rate.  Less than that, and it's moving towards a "seller's market" where there's upward pressure on home prices.  In other words, there's more demand than supply.  An absorption rate of more than 7 months is moving towards a "buyer's market", where there's downward pressure on home

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