I took a look at the absorption rate this morning. It’s 66%!. That’s ridiculously high. The absorption rate is the speed at which houses are selling. It’s a simple calculation. Just divide the amount of homes sold in the last month by the amount currently on the market. Any amount more than 20% indicates a seller’s market. Lower than 15% is a buyer’s market. Ours is 66%. That’s a screaming sellers market. Last year it was as high as 85%.
Another gauges to help foresee the future of real estate prices is the cost of rent versus the cost to buy. In some parts of the country the cost to buy is as much as 40% higher than the cost to rent. I took a look at that this morning for our area and it appears to be about even. I was able to find two homes on the same street built by the same builder. They were both about the same size and age. One was for sale and one was for rent. The monthly payment if you purchased the home would have been almost the same as the current monthly rent. That seems to indicate that our current trend will continue for at least the next few months. We will see what fall brings.
Until then…call us here are Valley Market Real Estate! Here is a direct link to our team: Valley Market Team
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