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.
Daly City’s inventory has continued to fall. From 2.01 in July; 1.96 in August; now 1.9. When you’re talking about 8.6 months’ inventory in September 2007 to just under 2 months’ in September of 2008 every little bit matters.
July 2008, 2007, 2006 absorption rates
August 2008, 2007, 2006 absorption rates
| 9/30/2008 | 9/30/2007 | 9/30/2006 | |
| Atherton | 6.80 | 3.30 | 7.70 |
| Belmont | 3.20 | 2.50 | 1.90 |
| Brisbane | 3.00 | 5.00 | 6.00 |
| Burlingame | 2.70 | 4.70 | 2.90 |
| Colma | 2.00 | 2.00 | 2.00 |
| Daly City | 1.90 | 8.60 | 2.50 |
| El Granada | 2.90 | 6.00 | 3.10 |
| Foster City | 3.30 | 1.60 | 2.00 |
| Half Moon Bay | 5.70 | 7.10 | 4.00 |
| Hillsborough | 3.40 | 3.10 | 3.20 |
| La Honda | 7.50 | 12.00 | 7.00 |
| Loma Mar | 2.00 | 2.00 | 3.00 |
| Menlo Park | 3.70 | 3.70 | 3.50 |
| Millbrae | 2.00 | 6.30 | 1.70 |
| Montara | 12.00 | 18.00 | 9.00 |
| Moss Beach | 18.00 | 5.30 | 4.00 |
| Pacifica | 3.20 | 5.70 | 3.60 |
| Pescadero | 11.00 | 6.50 | 5.50 |
| Portola Valley | 13.00 | 2.70 | 5.80 |
| Redwood City | 2.60 | 6.40 | 2.10 |
| Redwood Shores | 3.50 | 1.80 | 4.00 |
| San Bruno | 1.70 | 9.70 | 3.00 |
| San Carlos | 2.20 | 2.50 | 2.10 |
| San Gregorio | 2.00 | 2.00 | 2.00 |
| San Mateo | 1.80 | 3.90 | 1.70 |
| South San Francisco | 2.30 | 9.50 | 2.60 |
| Woodside | 9.80 | 7.20 | 9.70 |
Got a San Mateo County real estate question? Call me at 650.888.9268 or send me an email Vicki [at] CallVicki.com. If you like what you’ve read, subscribe to the San Mateo Real Estate Blog feed.
October 8th, 2008 at 4:20 am
Vicki, this is a great post! Good explanation of absorption rates
October 8th, 2008 at 3:09 pm
Thanks Donna!