July was a bit more predictable than June in the Greater Los Angeles housing market. For one, we sold even more homes, indicative of the summer surge we experience every year at this time as families take advantage of the break from school. The drops and surges were also more modest in July; no double-digit shifts. However, there were still plenty of changes worth noting, with six areas dropping further toward the buyer’s favor, four leaping higher into the seller’s graces, and two staying the course by holding their absorption rates in stasis.
- Burbank – 29%
- Encino – 16%
- Glendale – 30%
- Long Beach – 31%
- Los Angeles – 21%
- Northridge – 30%
- Palmdale – 23%
- Pasadena – 30%
- Rancho Cucamonga – 28%
- Reseda – 27%
- Upland – 27%
- Valencia-Santa Clarita – 31%
Absorption Rate FAQs
What Is an Absorption Rate?
In real estate, the absorption rate shows whether the market favors buyers or sellers. A rate of 20% or higher usually indicates a seller’s market, while 15% or lower means conditions favor buyers. These numbers are general guidelines, not strict rules.
Why Does JohnHart Only Include Single-Family Homes?
We focus only on single-family homes in our absorption rate because that’s what most of our clients are looking for. This helps us give a clearer picture of the market that’s most relevant to them.
How Does JohnHart Calculate Absorption Rates?
We use the same standard formula that’s commonly used across the industry:
The Lowest High of All Time
July’s most remarkable distinction was its absorption rate high of 31%, shared by both Long Beach and Valencia-Santa Clarita. This is remarkably low for the highest absorption rate of the month. In fact, it’s the lowest high we’ve recorded.
While Valencia-Santa Clarita needed to jump 7 percentage points to tie with Long Beach (the second most dramatic surge of the month), 31% is almost a record low for Long Beach – great news for prospective buyers. In fact, the only time it’s been lower since we’ve been sharing these stats was back in October 2022, when the seaside city dropped to 26%. So, if you’ve been dreaming of living in Long Beach, this could be your sign to stop dreaming and start doing.
The Usual Suspects
The lowest absorption rate for July was in Encino. No surprises there. The Valley community has built a reputation in our monthly absorption rates for favoring the buyer, and its modest two percentage point drop puts it just outside the threshold of a buyer’s market. The City of Los Angeles, another regular at the periphery of the buyer’s market, had the second-lowest absorption rate of the month at 21%, up 2 percentage points from June. This isn’t a very dramatic position for the city, which regularly hovers around this marker, give or take a few percentage points.
Finding the Overall Shift Amidst Modest Changes
July’s most dramatic shift predictably occurred in Northridge, an area prone to bold changes in absorption rate. After its 8 percentage point jump in July, the Valley community now sits at a 30% absorption rate, though we doubt it will stay there long. Right behind Northridge, with the second-highest leap of July, is the aforementioned 7 percentage point jump in Valencia-Santa Clarita.
The drops were even less dramatic in July, with Pasadena falling 7 percentage points for a 30% absorption rate, still landing it firmly in seller’s territory. Upland trails Pasadena with a 6 percentage point plummet to a 27% absorption rate. At first glance, this may not seem all that significant, but this is actually a record low for Upland. So, if you’ve been considering property in San Bernardino County, here’s your sign!
The Bigger Picture
At a glance, July may seem like a settling point since the surges and drops weren’t as extreme. But even with more surges in July than in June, we’re seeing a trend that favors buyers. One need only look at the highest absorption rate of the month to see it. Will the trend continue into August as we slide through the home stretch of the summer? We’ll see you in a month to let you know! But if you can’t wait that long, give one of our insightful agents a call for an expert’s prediction for your neighborhood.
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.
