What is the current inventory of homes in San Diego

One question that often comes up when talking about the current condition of the Real Estate market, is the Absorption Rate. The absorption rate can be defined as the time it would take the current inventory of homes to sell given the average selling pace of the past (typically six months, averaged).
The reason we do this is because it helps us to track trends in the market and thus figure out where it is heading.
However, absorption rate is NOT an exact science. Figuring it is based on the premise that one will be looking for a TREND. It is advised to consistently do the numbers each month, to be able to track a trend.
So... Absorption Rate (AR) = Number of Homes LISTED divided by Average number of homes SOLD Per Month over the past six months.

I did this exercise for 5 different areas today.* Here is what I have found:
1- Chula Vista

• ACTIVE: 1453
• SOLD:**278.50
• AR:5.21

2-Rancho Santa Fe

• ACTIVE: 254
• SOLD:** 9.6
• AR: 26.45

3-Carmel Valley

• ACTIVE: 215
• SOLD:**52.66
• AR: 4.08

4-Downtown San Diego

• ACTIVE: 570
• SOLD:**34
• AR: 16.76

5-Oceanside

• ACTIVE:1090
• SOLD:**232.83
• AR: 4.68

Doing the Same excessive for San Diego as a whole we get:

• ACTIVE: 15,945
• SOLD:**2758.66
• AR:5.78

In closing, we can see that we have areas with a very high AR while others are surprisingly low for a market that is perceived as a "Buyers Market". Typically speaking, a Buyer’s market exists when the absorption rate for homes exceeds six months; a Seller’s market exists when the absorption rate is fewer than six months, although that definition varies depending the source.

Once again, Happy Holidays and let me know if you would like any topic to be addressed in future posts.

*All data taken from MLS. This information might not include all listings available and sales recorded at the county.

**Average monthly Sales from past 6 months.

Rina Podolsky