April 2024 brings more of that same energy we saw in March as the industry shakes off the accumulated frost of the holiday hibernation. A lot of our communities continued to climb further into the seller’s market, though with less severity. One neighborhood really ingratiated itself to sellers with a double-digit surge. But it was a usual suspect (we’ll get to that in a moment). A few communities dropped back toward the buyer’s favor, but in admittedly modest amounts. All-in-all, April wasn’t a month of surprises. But we did also see an influx of new houses for sale in Los Angeles, which could point to an easier time for buyers on the horizon.
Absorption Rates – April 2024
- Burbank – 53%
- Encino – 22%
- Glendale – 41%
- Long Beach – 47%
- Los Angeles – 24%
- Northridge – 56%
- Palmdale – 28%
- Pasadena – 35%
- Rancho Cucamonga – 46%
- Reseda – 42%
- Upland – 47%
- Valencia/Santa Clarita – 44%
First… Our Absorption Rate FAQs
What is an Absorption Rate?
An absorption rate in real estate is a statistic that indicates whether a particular area favors home buyers or sellers. An absorption rate of 20% or more indicates a healthy seller’s market. In this kind of housing market, homes sell rapidly. Sometimes even for over the asking price. An absorption rate below 15% indicates a buyer’s market in which homes often stay on the market longer.
Why Do You Only Consider Single-Family Houses for Sale in Los Angeles?
We only consider single-family houses for sale in Los Angeles neighborhoods in our absorption rate formula. Why don’t we consider townhomes, condos and the like? Because the average JohnHart client is specifically searching for single-family homes. It’s just a matter of accurate representation.
How Do You Calculate an Absorption Rate?
By using this universally accepted formula:
Northridge Stays On-Brand in April
It should surprise absolutely no one that Northridge surged by 14 percentage points in April. It’s a surge-happy neighborhood. Sure, there was that 17 percentage point drop in February, but that was the anomaly. Northridge having the only double-digit surge of the month is pretty on-brand for this valley neighborhood. With April’s jump, Northridge secures the month’s highest absorption rates for any of our neighborhoods at 56%. Again, not a surprise. If you’ve got property to sell in Northridge, it’s pretty much always a good time.
The next highest surge for April is only half of Northridge’s. With a 7 percentage point leap, Glendale lands at a 41% absorption rate. Again, high demand has practically become the rule for this community. But could the addition of more houses for sale in Los Angeles neighborhoods shift things back to the buyers’ fortunes over the coming months? Even Northridge might not be able to hold strong.
A Duo of Drops Toward a Buyer’s Market
Two communities tied for the steepest absorption rate drop in April, though that stumble was a modest 5 percentage points. First up is Rancho Cucamonga, bringing in some relief for buyers from March’s intense 17 percentage point rocket. This brings the San Bernardino County neighborhood down to a still formidable 46% absorption rate. So, the sun continues shining on Rancho Cucamonga’s home sellers.
The other 5 percentage point drop in April belonged to another popular neighborhood: Pasadena. This is the second month of consecutive drops in the buyer’s favor for the city, though March’s was by a single percentage point. Pasadena leaves April at a respectable 35% absorption rate; still clearly favoring the seller.
Encino Slowly Climbs Into the Seller’s Market
Keeping with the theme of “no surprises”, the lowest absorption rate of the month goes to Encino, despite a 4 percentage point increase. Encino’s held the lowest absorption rate for our neighborhoods since November, when it was just narrowly beaten out by Palmdale. But with April’s 22% absorption rate, Encino is firmly out of the universal window for the buyer’s favor.
Will More Houses for Sale in Los Angeles Impact May’s Numbers
What can we expect for May? If last year’s numbers are anything to go by, more good news for sellers is on the horizon. Then again, we’re not sure how much higher Northridge can go. Yet, we did see a higher number of houses for sale in Los Angeles hitting the market in April. If that trend continues, we may see absorption rates drop closer to the buyer’s favor after all.
After working with, and for, many different real estate firms, it became apparent to Harout that there was a major disconnect between what consumers needed/wanted and the service that was being provided to them. It was upon this realization that Harout founded and opened JohnHart Real Estate; and as the CEO/Principal Broker he has continued to break from the norm and redefine real estate with an insatiable appetite to give his clients the service and attention they deserve.
