Just when you thought it was safe to take a break, September was a busier month than market patterns might lead you to believe. It seems that people are taking advantage of the autumn lull to list their homes with less competition. And homes aren’t exactly languishing on the market. Home sales increased by roughly 5% in September, but we’re seeing most of our communities move more into a seller’s market. To be more specific, seven of the communities we monitor walked further into seller’s territory in September, while only three tipped further toward a buyer’s market. That leaves two that stayed put. We’ll take a closer look after the FAQs.
- Burbank – 32%
- Encino – 19%
- Glendale – 27%
- Long Beach – 36%
- Los Angeles – 19%
- Northridge – 27%
- Palmdale – 23%
- Pasadena – 28%
- Rancho Cucamonga – 35%
- Reseda – 30%
- Upland – 28%
- Valencia/Santa Clarita – 30%
Absorption Rate FAQs
What is an absorption rate?
An absorption rate is a metric used in real estate (among other industries) to determine whether a specific market seems to favor the buyer or seller. Absorption rates of 20% or higher are said to indicate a seller’s market, whereas absorption rates of 15% or lower are meant to indicate a buyer’s market.
Why does JohnHart only consider single-family homes when calculating absorption rates?
We feel it’s more accurate to only factor single-family homes into our absorption rates, because the vast majority of our clients are focused exclusively on single-family homes.
How does JohnHart calculate absorption rates?
We calculate absorption rates with this universally accepted formula:
The September Slip
Illustrating how this industry tends to keep even the most observant professionals on their toes, the coveted community of Glendale slipped a considerable 11 percentage points toward a buyer’s market for the steepest drop of September. This brings Glendale down to a 27% absorption rate, its lowest since January. But we doubt the city will remain this low for long. If you’ve been thinking about that big Glendale home hunt, the signs don’t get much clearer.
There were just two more drops in September, and both were modest. Burbank stumbled 4 percentage points for a 32% absorption rate, and Upland dropped 3 percentage points to land at 28%. Neither are new frontiers for these communities.
High Absorption Rates with Low Drama
The surges into the seller’s market for September, though more numerous, were also less dramatic. Encino and Rancho Cucamonga tied for the most aggressive jumps, though these were only by 7 percentage points. For Rancho Cucamonga, this follows a three-month stretch when the community held a 28% absorption rate, ending September with a 35% absorption rate. So, it might be a good time to list in Rancho Cucamonga.
The Extremes Aren’t So Extreme
Even with one of the steepest surges of the month, Encino tied with the City of Los Angeles for the lowest absorption rates of September at 19%. While Encino leapt up to this number, Los Angeles achieved it simply by holding its ground from August.
Meanwhile, Long Beach skated by, earning the highest absorption rate for September, 36%, by a single percentage point. Just behind the coastal community, Rancho Cucamonga jumped to 35% for the second-highest absorption rate of the month.
Reseda Breaks Its Streak
Though it hasn’t hit any extremes this month, it’s worth pointing out that September found Reseda in its third consecutive month of modest but consistent surges. So, if you’re planning on listing in Reseda, the temperature just keeps getting better and better. But that won’t last forever, so consider striking while the iron’s hot.
A Closer Look
Remember, September is normally when we see the market beginning to ease up from the summer rush, but we personally sold more homes in September than in August. It underscores how important it is to pay close attention to the market, regardless of history, with careful, professional analysis. How does this apply to your community? Reach out to one of our talented agents to find out!
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.
