A December surge toward the seller’s favor is a holiday tradition in its own right when it comes to our monthly absorption rate analysis. It’s just how the “off-season” works in real estate. A lower volume of homes hitting the market typically tips the scales in the sellers’ favor. In December 2022, only one of our published neighborhoods (Glendale) dropped closer to the buyers’ favor. In December 2023, that doubled to two neighborhoods (Encino and Rancho Cucamonga). But this year, not a single neighborhood dropped closer to a buyer’s market. One did tread water. Yet, we sold around 10% more homes in December 2024 than we did in December 2023.
Absorption Rates – December 2024
- Burbank – 52%
- Encino – 29%
- Glendale – 39%
- Long Beach – 40%
- Los Angeles – 25%
- Northridge – 32%
- Palmdale – 28%
- Pasadena – 42%
- Rancho Cucamonga – 49%
- Reseda – 45%
- Upland – 54%
- Valencia/Santa Clarita – 32%
Absorption Rate FAQs
Let’s kick things off with some FAQs for those just joining us. If you know the score, go ahead and scroll down to the next section.
What is an absorption rate?
The absorption rate is a universally accepted statistic that we use to gauge whether a market favors the buyer or seller in a given neighborhood. In the majority of markets, an absorption rate of 20% or higher indicates a market that supports a seller’s goals. Likewise, absorption rates of 15% or lower indicate ideal conditions for homebuyers.
However, the unique housing markets of the Greater Los Angeles area consistently remind us that these numbers are simply suggestions. We can use it to take a neighborhood’s temperature so to speak. But anything’s possible out here.
You don’t factor in townhouses, condos, etc? Why not?
Our clients have shown us that they are overwhelmingly interested in single-family homes. Therefore, to paint the most accurate portrait of the housing market through a filter of their goals, JohnHart only factors single-family homes into our monthly absorption rate data.
How do you get the absorption rate percentage for a neighborhood?
JohnHart uses the following universal formula to calculate absorption rates for the neighborhoods we most prominently serve:
Up and Up and Upland
Though we expect a heavy surge toward a seller’s market each December, December 2024 brought us a particularly aggressive swell in the sellers’ favor. This was best exemplified in the city of Upland, where the demand for Upland homes for sale catalyzed what may be the most fervent leap we’ve seen since publishing these absorption rate analysis blogs. After a monumental increase of 25 percentage points, Upland handily took the highest absorption rate for December at 54%. We think this will calm down over subsequent months, but Upland is a consistently high-demand area.
Home Sellers Can Bank on Burbank
Burbank was a distant second when it comes to steepest surges, rocketing up 18 percentage points for the second-highest absorption rate for December, just behind Upland at 52%. Homes for sale in Burbank are also consistently in demand. After a summer that was somewhat kinder to buyers shopping for Burbank homes, it seems the city’s market has regained its overwhelming favoritism for home sellers. We haven’t seen Burbank this high since April!
Making a Scene in Encino
Encino is typically a safe haven for prospective homebuyers. But December 2024 shows the San Fernando Valley neighborhood as our third steepest absorption rate increase, jumping 15 percentage points to a 29% absorption rate. To highlight just how big of a deal this is for Encino, they were at a 12% absorption rate in September; our only neighborhood firmly within a buyer’s market. Yet, three months of increases (two modest and one major) have made that seem like a buyer’s distant dream. We have faith that things will level back out for Encino in the new year.
The True Cost of Consecutive Increases
This brings us to our next point: three of the areas we serve are immersed in a three-month streak of consecutive absorption rate increases. Encino is at the top of this list, having climbed 17 percentage points since its last drop in September. Pasadena joins Encino with three months of increases, though this was only a cumulative 10 percentage points. And, finally, Valencia/Santa Clarita climbed consistently since its September drop, but only amassed an 8 percentage point increase over that time. It just goes to show you that consecutive increases may point to a trend, but the size of the increase really does matter. Upland outpaced all three of these neighborhoods’ streaks in a single bound.
Our Favorite Rebel
Sorry to say that we don’t really have any stats to show in December for decreases toward the sellers’ market. The best we can do is the single neighborhood that refused to budge, opting to tread water instead of surge like the rest. It should come as no surprise to anyone who consistently reads our absorption rate blogs that this holdout was the ever-rebellious Northridge. It’s a neighborhood that really exemplifies that old adage “expect the unexpected.”
Predictions for January 2025
If January 2023 and 2024 are anything to go by, we can expect a lot better news for the buyers in our next absorption rate analysis. But if you’re considering selling your home, it’s worth noting that there are a lot of hungry buyers scouring the market. And with interest rates having just dropped, we’d recommend acting now while the market is still somewhat predictable. Our talented agents are just a click away!
