After October’s near-unanimous surge deeper into the seller’s good graces, it’s no surprise that November offered more divisive absorption rates as neighborhoods evened out. Sure, four neighborhoods started a streak of two consecutive months marching further into seller territory. But we saw seven communities rise higher in the seller’s favor and five drop closer to a buyer’s favor. Coincidentally, it was the same numerical split as we saw in November 2023. Not the same neighborhoods though.
- Burbank – 34%
- Encino – 14%
- Glendale – 38%
- Long Beach – 36%
- Los Angeles – 20%
- Northridge – 32%
- Palmdale – 23%
- Pasadena – 38%
- Rancho Cucamonga -38%
- Reseda – 34%
- Upland – 29%
- Valencia/Santa Clarita – 31%
Absorption Rate FAQs
What is an Absorption Rate?
In real estate terms, an absorption rate is a statistic used to indicate whether the market conditions in a city or neighborhood favor home buyers or sellers. Universally speaking, an absorption rate of 20% or higher indicates favorable conditions for home sellers. Absorption rates of 15% or lower indicate favorable home-buying conditions. However, these numbers are simply guides, not rules.
JohnHart Real Estate Only Factors Single-Family Homes Into Its Absorption Rates. Why?
We don’t add townhouses, condos, etc. into our absorption rate calculations because the overwhelming majority of our clients are searching exclusively for single-family homes. Therefore, we keep the focus on our clients’ interests for a more accurate portrayal of the market as it pertains to them.
How Does JohnHart Calculate Absorption Rates?
We use the same universally-accepted formula as everybody else:
A Trend That Home Sellers Will Love
The absorption rates for November 2024 showed four neighborhoods initiating a streak of increases further in the seller’s favor. The culprits?
- Encino
- Northridge
- Pasadena
- Valencia/Santa Clarita
Pasadena stands as the most aggressive of the bunch, climbing up a considerable four percentage points for a total absorption rate of 38%. This number ties Pasadena with two other neighborhoods for the highest absorption rates in November, but we’ll get back to that in a moment. The other three neighborhoods on their second consecutive month of absorption rate increases, Encino, Northridge, and Valencia/Santa Clarita, only bumped up by a single percentage point in November., Encino and Valencia/Santa Clarita, only bumped up by a single percentage point in November.
Encino’s Still Quietly Favoring the Buyer
Encino is the more interesting of the two since, even after two consecutive months of surging closer to the seller’s favor, it’s still arguably in buyer’s territory. In fact, it’s the only one of our neighborhoods with that clear distinction. Even after climbing, Encino is at a 14% absorption rate, the lowest of any of our neighborhoods for November.
November’s High is Refreshingly Low
As we mentioned earlier, three neighborhoods tied for November’s highest absorption rate. Pasadena is joined by Glendale and Rancho Cucamonga at a 38% absorption rate. Maybe it’s because we just published our Neighborhood Watch Guide for those considering Glendale homes for sale?
Much to the relief of potential homebuyers, this high is relatively low compared to our absorption rates in October 2024 (when Rancho Cucamonga was at a 43% absorption rate). And when we look back to November 2023, Rancho Cucamonga again claimed the top spot with a 53% absorption rate! So, this is shaping up to be an overall easier season for the buyer.
Good News for Upland Home Buyers
The steepest drop (by far) for November 2024’s absorption rates was the city of Upland. Plummeting 10 percentage points to a 29% absorption rate, Upland hits an all-time record low (at least since February 2023 when we first started publicizing Upland’s absorption rates). Great news for homebuyers searching for houses for sale in Upland!
Some Expected Surging
November gave us yet another tie, this time for the highest surges for the month in the seller’s favor. Jumping up eight percentage points each, Glendale and Reseda surged to 38% and 34% respectively. These aren’t wildly outside of the bounds of what we’ve come to expect from these two areas in 2024.
Will the Streak Continue?
It will be interesting to see whether Encino, Pasadena, and/or Valencia/Santa Clarita keep up their streak of consecutively increasing absorption rates in December. But overall, this month highlights that homebuyers in Los Angeles have a lot to be grateful for, even if it’s not immediately obvious. One needs only look back a year ago to see how the market is leveling out slowly but surely. If you’d like to take advantage of these conditions, reach out to one of our highly skilled agents today.
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