Absorption Rate Definition

The rate at which a market can absorb additional units of supply without causing market saturation and severe price distortions. For example, during a recessionary period, many homeowners may list their house for sale. Since the supply of homes entering the home resale market increased without a corresponding increase in demand, the market absorption rate has been exceeded, and the market price of the resale homes declines. A simple definition is the number of months it takes to sell the current inventory at the present rate of sales.

Comments

Post a Comment

Popular posts from this blog

Why Are So Many Trees Dying in Colorado?

Image
On a recent trip on I-70 to evaluate some land for a client, I was confronted with sad but beautiful image of red forests stretching for miles across the hills. The image of a red "evergreen" contrasting against the green scenery is mesmerizing at first until you take a closer look at red death destroying millions of trees in Colorado. Beetle epidemics across the western United States are becoming more obvious every season with entire landscapes turning red and brown as trees die. In northwest Colorado the beetle epidemics, triggered by extended drought in aging forests, are intensifying at an alarming rate, and there is little that can be done to stop them. Actions can be taken to protect high value areas such as ski areas, developed campgrounds and trees in people’s yards. Hastening Death: Pine beetles carry a fungus on their body and legs. Once they enter the tree, the fungus multiplies and spreads. This blue stain fungus blocks the transport of water up the tree’s trunk
Read more

How much you would need to afford rent in Colorado?

Image
There is nowhere in this country where someone working a full-time minimum wage job could afford to rent a two-bedroom apartment. Downsizing to a one-bedroom will only get you so far on minimum wage. Such housing is affordable in only 12 counties located in Arizona, Oregon and Washington states, according to the report by the National Low Income Housing Coalition. You would have to earn $17.14 an hour, on average, to be able to afford a modest one-bedroom apartment without having to spend more than 30 percent of your income on housing, a common budgeting standard. Make that $21.21 for a two-bedroom home -- nearly three times the federal minimum wage of $7.25. The minimum hourly wage required to afford rent on a two-bedroom apartment, of course, depends on where you live -- ranging from a low of $11.46 in some counties in Georgia to a high of $58.04 in the San Francisco Bay Area. The most expensive state for housing is Hawaii, where workers would need to make $35.20 an hour to afford
Read more

Green Homes in Colorado: Saving Rain Water

Image
Colorado’s hot, dry summer’s weather may mean another round of water shortages. With water restrictions in place, keeping your family’s backyard flower and vegetable gardens moist and viable could be a serious challenge. Consider purchasing a rain barrel. These heavy-duty plastic or wood barrels catch rainwater and store it until you need it. A rain barrel allows for the practical reuse of water that otherwise would run down your driveway into a street drain, form puddles in your yard or feed into area streams. Reusing rainwater doesn’t just help the environment; it can lower your water bill and teach your kids about the importance of water preservation. The federal Environmental Protection Agency estimates that lawn and garden watering comprise nearly 40 percent of household water use during the summer, and that a rain barrel can save most homeowners about 1,300 gallons of water during peak summer months. Because it’s naturally soft and doesn’t contain minerals, chlorine, fluoride or
Read more

Fed Votes to Raise Key Interest Rate Again

Image
On Wednesday, the Federal Reserve took a largely expected move to raise its key interest rate one-quarter percentage point. This marks the second of three hikes that is expected to occur this year. While mortgage rates aren’t directly tied to the Fed’s key interest rate, rates are still influenced by the movement. Mortgage rates are predicted to start rising, and many homeowners and prospective homeowners are already bracing for an uptick. In a recent survey of home buyers and owners by Berkshire Hathaway, 55 percent of millennials reported discouragement about buying a home due to rising rates. Some 68 percent feel pressured to buy a home before rates increase further. The latest rate hike is partly justified from ongoing economic expansion and also a steadily falling unemployment rate, however, the Federal Reserve should be mindful of the lower than expected rate of inflation and the consequent low interest rates on long-dated bonds, like 10-year Treasury and 30-year mortgage
Read more

August 2018 Market Statistics Home Sales for Metro Denver

Image
Greater Denver Metro home sales continued to slow slightly, which is typical for this time of year, especially after a strong summer selling season. Year to date, homes sales are down just one percent as compared to last year. Most notably, sellers continued to add new listings of homes for sale to the market—4 percent more than last month. That, combined with homes staying on the market about four days longer than last month, could give your buyers more options and more time to browse. Watch the August 2018 market statistics video above and look down below for infographics and reports. Home Sales In August, 5,455 homes sold, 5% lower than last year and flat as compared to last month. Year to date, sales are only 1% lower than this time last year. There was also a decrease in the number of homes going under contract. Throughout the month, contracts were placed on 5,297 homes, a 3% decrease from last month. Home Sales Year-Over-Year Change August 2017 -- 5,731 August 2018
Read more