Real Estate in Nanaimo - Absorbtion rates
I've spent some time this morning looking at current trends in real estate in Nanaimo. It's been a while since I calculated the absorption rates. This information helps me understand the real estate market in Nanaimo and where it is headed.
The definition of absorption rates is the number of weeks it takes to sell the current real estate inventory in Nanaimo at the present rate of sales.
The market has been a little slow for this time of the year so I thought it would be interesting to calculate the absorbtion rate to see how it compares to this time last year. Every month VIREB (Vancouver Island Real Estate Board) supplies members with statistics on the past months activity in real estate in Nanaimo. I will use the numbers I have received from them.
The absorption rate of single family homes and condos in Nanaimo in May.2011 in comparison to May 2010:
Single Family Homes
May 2010- 22.05 weeks to sell the amount of inventory that was on hand at that time
May 2011 - 26.64 weeks to sell the inventory that was currently on hand at the end of May
From the numbers above you will see that homes in May 2011 were selling at a slower pace than they were at the same time the year before. A declining figure indicates that the inventory is decreasing as more homes are being sold than are coming onto the market. In turn a rising absorption rate indicates that there are more homes coming on the market than there are buyers looking to buy. These numbers would indicate that we are experiencing a buyer's market.
May 2010- 31.09 weeks to sell the amount of inventory that was on hand at that time
May 2011 - 30.35 weeks to sell the inventory that was currently on hand at the end of May
The condo market in Nanaimo has not changed very much from last year. It is taking on average half a week less to sell a condo in 2011. The condo numbers indicate that we are experiencing a buyers market .
By tracking these numbers monthly it helps me understand better what type of real estate market Nanaimo is experiencing. In addition these absorption rates assist me in advising my clients on realistic expectations on the length of time it will take to sell their home.
For additional information on absorption rates and other stats on the state of the Nanaimo real estate market please give me a call.