Buyers’ Market vs. Sellers’ Market – 1st Qtr 2011

In December of 2009 I wrote a blog that took a look at the San Diego market so buyers and sellers would have a better idea on how to handle a purchase or a sell. The data gathered at that time was only useful for a short period of time because the real estate market is continuously changing. Since then I calculate this data once a quarter.

To learn how this information can be used visit my December 2009 blog “Buyers’ Market vs. Sellers’ Market”.

Absorption rate is used to determine the supply vs. demand of real estate. It is calculated by dividing the amount of inventory by how many properties are selling in a month.

1 to 4 months supply of homes is a Sellers’ Market
5 to 6 months supply of homes is a Normal Market
7 or more months supply of homes is a Buyers’ Market

The real estate market we are in today is not an ideal market to calculate the absorption rate because of short sales. When an offer is submitted to a bank on a short sale it typically takes 60 to 90 days to hear back and during this time the listing agent usually puts the property into a status of Contingency, which removes it from the actively supply count. In this state the property is not actively being sold neither is it in escrow. The following data is a look at the San Diego County real estate market as of April 1, 2011. First we look at San Diego County by geographic regions then break down the numbers by price.

All of San Diego County
Active homes for sale: 12,151
Contingent homes: 3701
Sold homes per month over the last three months: 2322
Absorption rate of active homes: 5.2
Absorption rate of active and contingent homes: 6.8

North San Diego County
Active homes for sale: 4893
Contingent homes: 1142
Sold homes per month over the last three months: 831
Absorption rate of active homes: 5.9
Absorption rate of active and contingent homes: 7.3

Central San Diego County
Active homes for sale: 3540
Contingent homes: 947
Sold homes per month over the last three months: 677
Absorption rate of active homes: 5.2
Absorption rate of active and contingent homes: 6.6

South San Diego County
Active homes for sale: 1736
Contingent homes: 1045
Sold homes per month over the last three months: 472
Absorption rate of active homes: 3.7
Absorption rate of active and contingent homes: 5.9

East San Diego County
Active homes for sale: 1276
Contingent homes: 476
Sold homes per month over the last three months: 254
Absorption rate of active homes: 5.0
Absorption rate of active and contingent homes: 6.9


Up to $200,000 Homes
Active homes for sale: 2186
Contingent homes: 1208
Sold homes per month over the last three months: 598
Absorption rate of active homes: 3.7
Absorption rate of active and contingent homes: 5.7

$200,001 to $400,000 Homes
Active homes for sale: 4315
Contingent homes: 1884
Sold homes per month over the last three months: 1039
Absorption rate of active homes: 4.2
Absorption rate of active and contingent homes: 6.0

$400,001 to $600,000 Homes
Active homes for sale: 2369
Contingent homes: 490
Sold homes per month over the last three months: 441
Absorption rate of active homes: 5.4
Absorption rate of active and contingent homes: 6.5

$600,001 to $1,000,000 Homes
Active homes for sale: 1950
Contingent homes: 192
Sold homes per month over the last three months: 238
Absorption rate of active homes: 8.2
Absorption rate of active and contingent homes: 9.0

$1,000,001 to $1,500,000 Homes
Active homes for sale: 725
Contingent homes: 34
Sold homes per month over the last three months: 62
Absorption rate of active homes: 11.7
Absorption rate of active and contingent homes: 12.2

$1,500,001 to $5,000,000 Homes
Active homes for sale: 896
Contingent homes: 25
Sold homes per month over the last three months: 47
Absorption rate of active homes: 19.1
Absorption rate of active and contingent homes: 19.6

$5,000,001 plus Homes
Active homes for sale: 126
Contingent homes: 0
Sold homes per month over the last three months: 2
Absorption rate of active homes: 63
Absorption rate of active and contingent homes: 63

Note: Small towns and communities far from the major populated areas were not used in the breakdown calculations of the county, which is why their sum does not add up to San Diego County as a whole.
It is easy to see that San Diego County is in a normal market for the majority of the categories, which has been the trend for about the last nine months. There is a noticeable increase in activity in North County from more homes on the market to more homes being sold. More comes are on the market for the high-end priced homes while more of the low-end priced homes are selling.

There are many distressed homes but the banks are not in a position to recognize the losses on their books as they will become insolvent. Expect a constant and continual flow of distressed homes coming onto the market for the next several years.

Here are reasons to start getting serious about buying.
Historically low interest still
Large inventory of homes
Cost of renting is going up
Depressed prices

If you want to know the absorption rate of a particular area do not hesitate to contact me.

Visit us at www.877homes.com