Available Inventory & Absorption Rates in SE Portland
March 28, 2012, by Mark Wheeler
Absorption rate is a way to track how many real estate listings are on the market versus how many listings are selling within any given period of time. It looks at monthly inventory; in other words, how many months would it take for all of the available listings to sell, if no new listings entered the market. Of course this is hypothetical, but it can be a revealing statistic that helps to identify trends.
I like to look at the absorption rate of a specific area, regarding a specific type of real estate, and within specific price points. I was wondering exactly what is going on with SE Portland single family detached housing listings & sales since January 2012. November & December tend to be fairly slow months for real estate sales, and things usually pick up after the New Year begins. So, this past January through March is the time period that I’m tracking right now.
First I looked at all of “Close In SE Portland” as commonly defined by zip codes 97214, 97215, 97202 & 97206. Then I narrowed the results down to only the areas that tend to be the “hottest” in SE Portland; these can very generally be defined by zip codes 97214, 97215 & 97202. Lastly, I broke that search down by price points.
If you look at this spreadsheet, you will see those results. What is interesting to me is that available inventory is very low. About 6 months is typically considered “balanced,” neither a strong buyers’ market nor a strong sellers’ market. Both are approximately equal at about 6 months of inventory. Under 6 months points to a sellers’ advantage in the market, over 6 months indicates buyer advantage. With all of the hype regarding it supposedly being a buyers’ market, these results point to the opposite conclusion, with some price ranges having only around 1 to 3 months of inventory.
There are two price points as of today that have more than average inventory for sale. In this “hot” area of SE Portland, there is about 7.6 months of inventory priced between $450k – $550k. There are currently 13 available properties in this price range. Between $750k – $850k there is over 12 months of inventory, however this is represented by only 4 available listings. These higher priced properties tend to not sell as quickly as the lower end of the spectrum.
These days, properties priced under $450k, and especially under $350k, tend to be the fastest moving sector of Portland real estate.
I can run these numbers for any area around the Portland Metro region, and for almost any type of property. If you have any questions or comments, please contact me directly.
Thanks for reading!