Buyers' Market vs. Sellers' Market – 2nd 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 July 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: 12,437
Contingent homes: 3771
Sold homes per month over the last three months: 2953
Absorption rate of active homes: 4.2
Absorption rate of active and contingent homes: 5.2

North San Diego County
Active homes for sale: 5191
Contingent homes: 1199
Sold homes per month over the last three months: 1117
Absorption rate of active homes: 4.6
Absorption rate of active and contingent homes: 5.7

Central San Diego County
Active homes for sale: 3610
Contingent homes: 992
Sold homes per month over the last three months: 858
Absorption rate of active homes: 4.2
Absorption rate of active and contingent homes: 5.3

South San Diego County
Active homes for sale: 1630
Contingent homes: 1040
Sold homes per month over the last three months: 547
Absorption rate of active homes: 3.0
Absorption rate of active and contingent homes: 4.9

East San Diego County
Active homes for sale: 1289
Contingent homes: 444
Sold homes per month over the last three months: 323
Absorption rate of active homes: 4.0
Absorption rate of active and contingent homes: 5.4


Up to $200,000 Homes
Active homes for sale: 2084
Contingent homes: 1253
Sold homes per month over the last three months: 659
Absorption rate of active homes: 3.2
Absorption rate of active and contingent homes: 5.1

$200,001 to $400,000 Homes
Active homes for sale: 4309
Contingent homes: 1917
Sold homes per month over the last three months: 1335
Absorption rate of active homes: 3.2
Absorption rate of active and contingent homes: 4.7

$400,001 to $600,000 Homes
Active homes for sale: 2460
Contingent homes: 497
Sold homes per month over the last three months: 575
Absorption rate of active homes: 4.3
Absorption rate of active and contingent homes: 5.1

$600,001 to $1,000,000 Homes
Active homes for sale: 2112
Contingent homes: 191
Sold homes per month over the last three months: 315
Absorption rate of active homes: 6.7
Absorption rate of active and contingent homes: 7.3

$1,000,001 to $1,500,000 Homes
Active homes for sale: 818
Contingent homes: 32
Sold homes per month over the last three months: 98
Absorption rate of active homes: 8.3
Absorption rate of active and contingent homes: 8.7

$1,500,001 to $5,000,000 Homes
Active homes for sale: 932
Contingent homes: 26
Sold homes per month over the last three months: 69
Absorption rate of active homes: 13.5
Absorption rate of active and contingent homes: 13.9

$5,000,001 plus Homes
Active homes for sale: 150
Contingent homes: 1
Sold homes per month over the last three months: 2
Absorption rate of active homes: 75
Absorption rate of active and contingent homes: 76

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.

The two previous quarters San Diego County was in a Normal market but the 2nd quarter of 2011 the market has become a sellers’ market. Even though there are about 300 more homes on the market than there was three months ago about 600 more homes are being sold each month. A more and more frequent buyer these days is the All Cash buyer. These buyers are going after the less expensive homes making it tough for buyers who need a loan to compete.


The following reasons to get into the market are the same as last quarter with one addition.

Historically low interest still
Large inventory of homes
Cost of renting is going up
Depressed prices
(New) All Cash buyers are investors and they typically invest wisely

If you want to know the absorption rate of a particular area contact us at www.877homes.com