You may have noticed that I’ve posted a few Absorption rate charts for some of our local towns. I’m planning on doing some more even though I know they’re boring reading unless of course you happen to live in that town and are thinking of selling or you already have your home on the market.

To date I’ve posted Hampstead, Atkinson and Salem NH.  But what does it all really mean and why should you care about Absorption rates?

Why should I care?

Traditionally Absorption Rates are used to watch market trends. is it a buyers market? A sellers market?  Or is it a balanced market? It is also used by REALTORS to help determine how long it would take a particular property in a particular price range to sell.   Just to give you some perspective a sellers market absorption rate would be less than six months. In 2005 at the height of our sellers market in Southern NH the absorption rate in Hampstead was three months or less. Today it’s a very different story.

The rule of thumb is…

Sellers Market = less than six months (usually 4-5)

Balanced Market = six months supply

Buyers Market = over six months supply

It’s not rocket science

But it gives you a snap shot of where we are. An Absorption Rate for all of Rockingham County shows us to have an average of 12.2 months supply of homes on the market. Of course that just confirms what we already know but it will be interesting to see how this changes next month. Will the numbers increase or decrease?  What do you think?

*All reports are published Nov. 2008, based on data available at the end of Oct. 2008.
All reports presented are based on data supplied by the Massachusetts Real Estate and New Hampshire Real Estate or their MLS. Neither the Associations nor their MLSs guarantee or are in anyway responsible for their accuracy. Data maintained by the Associations or their MLSs may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.

NH Real Estate Professionals Jay and Monika McGillicuddy