The latest Absorption Rates in Frederick County

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the ground can\'t absorb any more water nor for sale homes.

A few months ago, I introduced you to the term - Absorption Rate. Basically, if we stop putting new homes on the market, how long would it take to sell all the homes. It’s like an old retail term “Inventory Turns” Very similarly, you have holding cost and depreciation that affects the housing inventory. The only problem with housing inventory, you can’t remove old stock…some homes stay much longer than the rest of the homes. This is usually the case for over priced homes, undesirable locations, or deplorable conditions. (All of which can be overseen with the right price.)

The activity across the state seems to have increased, as expected with the “Spring Market.” The increase in inventory had a negative impact on all the Absorption rates. The rate of sales was not directly proportionate to the increase of number homes. The Middletown and Walkersville area had the largest increase of 4 more months. The question is, will these homes clear out through attrition or sales by the end of summer? Historically the inventory peaks around July then lies flat for a few months, and then decreases into the winter. So, it will be easy to predict the inventory will go down, but we need the number of sales to remain the same or even increase. (I know, duh!)

The news media is starting to see an indicator of an end to the housing crisis and there are signs that some buyers are finally realizing the prices are just right for them. Let’s hope that the lending industry helps QUALIFIED buyers get into loans. It is truly not over until the last foreclosure hits the market from all the ARM resets from all the over extended buyers. Buyers of today have been one of the most qualified set of buyers that most have seen in a long time. (lenders running scared)

Anyways…here’s the chart of local and adjoining activity.

Absorptions in and around Frederick County 5/27/08

Area Active Contract Sold in last 90 Days Absorption Rate
Adamstown & Point of Rocks 35 15 7 9 Months
Brunswick & Knoxville 76 15 18 12 Months
Frederick 1234 237 303 12 Months
Ijamsville 50 4 11 18 Months
Middletown & Myersville 157 22 30 17 Months
New Market 147 25 35 14 Months
Thurmont & Emmitsburg 118 21 31 14 Months
Walkersville & Woodsboro 84 16 18 15 Months
         
Frederick County 2143 380 495 14 Months
Montgomery County 6122 1754 1919 11 Months
Washington County 1413 167 253 17 Months
Howard County 1976 491 625 10 Months
Carroll County 1229 219 305 13 Months
Maryland 46458 8412 10884 14 Months

Have a great day. If you are in the market to buy a home, call me…let’s talk.

May 27, 2008 · Filed Under Frederick MD Real Estate, Frederick Market Conditions, Market Condition

Comments

3 Responses to “The latest Absorption Rates in Frederick County”

  1. Chris Griffith on May 27th, 2008 8:18 pm

    I just did the absorption rates for a neighborhood in Estero. 9.33 years. Holy Shamoley.

  2. Boomer Jack Boardman on May 28th, 2008 5:02 am

    Unfortunately, the number of “registered vacant” properties here continues to grow [sigh].

    Boomer Jack Boardmans last blog post..Remembering—A visit to Fort Snelling National Cemetery

  3. gotbob on May 28th, 2008 9:35 am

    Chris, looks like you have a few homes on the market then. Longer listing agreements.

    Boomer, I haven’t dug into the vacant homes. We are not required to register them on the MLS. But I am sure the numbers are stifling here too.

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