Just when you thought it was safe to buy that house in Burbank, October’s absorption rates show us that the seller’s market still has plenty of life in it. It’s almost like the end of a horror movie when it seems like the slasher is finally down for the count, only to rise back up, mercilessly murdering any hopes of lowball offers. In October, seven neighborhoods surged while only four dropped closer to a buyer’s market. Not only that, but the surges were significantly more dramatic than the drops. Sure, there were no big surprises. But October’s absorption rate analysis is letting its mask drop and revealing a sweet treat for homesellers in some of our most in-demand neighborhoods.
- Burbank – 40%
- Encino – 20%
- Glendale – 32%
- Long Beach – 38%
- Los Angeles – 19%
- Northridge – 32%
- Palmdale – 22%
- Pasadena – 26%
- Rancho Cucamonga – 38%
- Reseda – 29%
- Upland – 32%
- Valencia-Santa Clarita – 28%
Absorption Rate FAQs
What is an absorption rate?
An absorption rate is a statistic that we can use in real estate to estimate whether a specific area favors home buyers or sellers. Universally speaking, an absorption rate of 18% or higher tends to indicate a seller’s market, meaning conditions favor the seller. Likewise, absorption rates of 15% or below are generally considered a buyer’s market. However, there are always exceptions to the statistics, as the volatile markets of Greater Los Angeles prove time and time again.
Why does JohnHart only factor single-family homes into monthly absorption rates?
Our clients have shown us that they have an overwhelming interest in single-family homes. Therefore, we feel that adding townhomes and condos only muddies the results. To give the picture most accurate to our client’s interests, our absorption rate analysis solely focuses on the single-family home markets.
How does JohnHart calculate absorption rates?
We employ the same universal formula anyone uses to calculate absorption rates:
Higher Than It Looks
There’s no running or hiding, so let’s just jump right into the highest absorption rate of the month: Burbank, with an absorption rate of 40%. This is by no means Burbank at its highest, but the coveted neighborhood hasn’t veered this sharply into the seller’s territory since April. The 8 percentage point surge also nets Burbank the steepest jump for October – not shabby, but again, no record-setter.
Right behind Burbank is Long Beach, steadily climbing its way to a 38% absorption rate. This is Long Beach’s third consecutive month of modest movement further into the seller’s favor, securing their highest absorption rate since February. Again, nothing jaw-dropping, but still worth noting for anyone on the fence about listing their Long Beach home.
Hidden Treats for Home Buyers
That’s not to say October reserved treats for the sellers and tricks for the buyers. The City of Los Angeles spent its third consecutive month at the gates of the buyer’s market with a 19% absorption rate. This was the lowest absorption rate of the month as Encino tied up two consecutive months of very modest surging, creeping up a single percentage point to a 20% absorption rate, its highest since February, and the month’s second lowest stats.
As we mentioned, the drops were modest when compared to the surges in October. In fact, the steepest drops of the month were just two percentage points each in Pasadena and Valencia/Santa Clarita. This is more notable for Pasadena since it brings us the city’s lowest absorption rate since January.
There is No Off-Season Anymore
Having sold roughly the same number of homes in October as we sold in September, the autumn isn’t quite the dead zone the industry might have you believe. Perhaps we’re simply seeing people wake up to the benefits of selling a home in the fall: more alluring curb appeal, less competition, and reduced pressure. But October’s numbers show that enough demand remains to give home sellers some real leverage. If you’re considering listing your home, buying a home, or just want to plan for the future, reach out to an agent to see how these absorption rates, along with other data, can be used to navigate the smoothest route to your goal.
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.
.jpg){kind=link}