When we started publishing these absorption rates every month, we’d never in a million years have predicted we’d hit a point in which the neighborhood with the highest surge toward a seller’s market was also our lowest absorption rate for the month. But here we are. Looking at June as a whole, it sure looks a lot like we’re generally drifting into the buyer’s favor after years of markets that predominantly favor the seller. We’re not quite there yet, so things can swing back. But of the 12 communities we regularly highlight, seven dropped closer to the buyer’s favor, and three simply treaded water. And the two that jumped further into the seller’s territory? They only did so by a few percentage points at most.
- Burbank – 29%
- Encino – 18%
- Glendale – 35%
- Long Beach – 36%
- Los Angeles – 19%
- Northridge – 22%
- Palmdale – 26%
- Pasadena – 37%
- Rancho Cucamonga – 28%
- Reseda – 23%
- Upland – 33%
- Valencia-Santa Clarita – 24%
Absorption Rate FAQs
What is an absorption rate?
An absorption rate is a helpful metric used to determine whether the current housing market of a particular area favors buyers or sellers. Generally, absorption rates of 18% or higher indicate a seller’s market, whereas rates of 15% or lower suggest a buyer’s market. It’s important to note that these thresholds are guidelines… not strict rules.
Why does JohnHart only focus on single-family homes when calculating absorption rates? What about condos, townhouses, etc.?
At JohnHart, the majority of our clients prefer single-family homes over townhouses, condos, and similar properties. In an effort to align our analysis with what matters the most to our clients, we focus exclusively on single-family homes when calculating our monthly absorption rates.
How does JohnHart calculate an absorption rate?
To calculate our absorption rates, we use the following universal formula:
Prospective Northridge Buyers, Take Note…
The biggest drop in June came from Northridge, a community that’s no stranger to dramatic moves. We’re just surprised it wasn’t a surge to even further go against the grain (for those that check in with us monthly, you know what we mean). Northridge was the only double-digit shift in June, plummeting 14 percentage points to a 22% absorption rate. This isn’t a record low for Northridge, but the only time we’ve seen it go lower was in November 2022 when it fell to 17%. So, if you’re considering a move to Northridge, it’s high time to get your trusted agent on the line.
The second steepest drop for June was in Valencia-Santa Clarita, where the neighborhood plunged 8 percentage points. Paltry when stacked up beside Northridge, but still significant. This brings Valencia to a 24% absorption rate, decent enough to not freeze any buyers or sellers in their plans. However, this is their lowest mark since January and a second consecutive month of drops.
Small Gains for Sellers
If you’ve already blown through your popcorn, don’t be too disappointed. The leaps into the seller’s market were much less dramatic in June. Climbing a mere three points toward a seller’s favor, Encino now holds an 18% absorption rate. You read that right. They climbed to 18%. But Encino is often the kindest market for buyers based on absorption rate stats, so this low number shouldn’t be too shocking. Pasadena was just behind Encino with the only other move toward the seller’s market for June: two percentage points for a total absorption rate of 37%.
The Highest is the Lowest in June
But here’s where these gains get interesting. Pasadena’s modest climb earned it the highest absorption rate for all of our neighborhoods and cities this month. Not by much, granted. Long Beach is right behind them at 36%. But on the other end of the spectrum, we have our highest gain of the month, Encino, as the lowest total absorption rate of the month. Who saw that coming? So, if you’ve been on the fence about buying that Encino dream home, maybe June is your warning shot?
The Treading Water Awards
Finally, we have to give an honorable mention to Long Beach, Rancho Cucamonga, and Upland for not moving the needle at all in June. It’s not exceedingly rare that we see a neighborhood tread water, but three in one month? This could be a further signal that these normally active markets are beginning to finally move down to the seller’s favor. Add in the fact that four of these neighborhoods (Burbank, Los Angeles, Northridge, and Valencia) are in their second consecutive month of drops, and one neighborhood (Reseda) is in its third consecutive month of drops. We don’t feel like we’re exactly consulting tea leaves here!
But this is just a general report. As always, if these numbers get you thinking about your real estate moves, then it’s probably a good time to get a professional opinion from someone who knows the market inside and out. And we just so happen to know a few people who could help!
With a brand that says as much as JohnHart’s, Senior Copywriter Seth Styles never finds himself at a loss for words. Responsible for maintaining the voice of the company, he spends each day drafting marketing materials, blogs, bios, and agent resources that speak from the company’s collective mind and Hart… errr, heart.
Having spent over a decade in creative roles across a variety of industries, Seth brings with him vast experience in SEO practices, digital marketing, and all manner of professional writing with particular strength in blogging, content creation, and brand building. Gratitude, passion, and sincerity remain core tenets of his unwavering work ethic. The landscape of the industry changes daily, paralleling JohnHart’s efforts to {re}define real estate, but Seth works to maintain the company’s consistent message while offering both agents and clients a new echelon of service.
When not preserving the JohnHart essence in stirring copy, Seth puts his efforts into writing and illustrating an ongoing series entitled The Death of Romance. In addition, he adores spending quality time with his girlfriend and Romeo (his long-haired chihuahua mix), watching ‘70s and ‘80s horror movies, and reading (with a particular penchant for Victorian horror novels and authors Yukio Mishima and Bret Easton Ellis). He also occasionally records music as the vocalist and songwriter for his glam rock band, Peppermint Pumpkin.
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.
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