ABSORBSION RATES in the North Okanagan Real Estate Market.
The current buzz statistic is Absorbsion Rate...
To determine the Absorbsion rate, we look at the Inventory on hand in a given sector, and divide it by the current demand for that product- the number of Sales made in the matching time period. This gives a number that tells us how many months it would take to sell out all the available inventory. What I like about this stat is that it blends the factors that define the market.. How much is out there For Sale and how much is being consumed by Buyers - which is really what it is all about.
Matters of price stem from the relationship of supply and demand, as does the number of days on the market - but this one graph does a pretty good job of showing the true state of the market.
Note that from March to August of 2007 there was never more than 5 months worth of inventory in any sector.. meaning that in theory.. everything would sell in less than 150 days. Fast forward to October.. where it would take approximatey 550 days to sell out the Residential Market!
That means that as a Buyer.. you may find there is more to choose from and that you may find a seller who has greater motivation to accept an offer on your terms. Eventually, the cycle will sort itself out and we will see the less motivated sellers take their properties off the market - until the absorbsion rate falls back in line.
If you are thinking of buying.. do not shy away from this market - there are motivated sellers out there - who are serious about entertaining your offers and those who need to sell - regardless of the time of year and the challenges in the market. It is a great time to be looking and to be prepared to buy!
