Absorption Rate

The absorption rate has remained flat most of the year. From April to October the absorption rate averaged 18.5%. We experienced higher absorption rates during the Spring/Summer of 2009 than we had in the past three Spring/Summers (2006, 2007, and 2008). This has continued through the Fall/Winter months with absorption rates between 16% - 19% this year as opposed to 12%-10% in 2007 and 2008.  This an early indication that the local real estate marketing is moving towards a balanced market. I expect to see demand actually pick up as more buyers try to purchase properties before the tax credit expires in Spring 2010.  There will continue to be increase in inventory too, so we’ll have to see if this increase in inventory offsets the increase in demand and keeps the absorption rates in the 16% - 20% range. Fairfax, Arlington, and Montgomery counties currently have the highest absorption rates at approximately 17%; while Baltimore county has the lowest absorption rates at approximately 9%.

At A-Team Realty, LLC we use an area’s absorption rate to determine that area’s market type. This is our model:

Days on Market

The average time to sell a home increased 8% last month.  It still takes about two and months to sell a property in the current market. This is the lowest number of days to sell a property (in December)in our area since December 2005!

Number of Sales

The number of sales decreased 15.5% last month.  This is a normal seasonal trend that we have seen in the past.  We recorded 15% more sales in 2009 than in 2008, so the demand of homes has picked up! I expect to see the same in the first half of 2010.  I now expect to see the number of sales slow, but remain relatively high for the winter season.

Sales Price

The average sales prices in the region increased about 11% on average last month!  I was surprised see such an increase.  I believe the first time home buyer tax credit is partly responsible for this increase in prices.