Inventory Watch | SF Absorption Rate | Jan 22

The Absorption rate is a key indicator used to inform sellers on how to price their home to secure the highest return in the shortest period of time and what buyers need to do to compete in this market to secure the winning offer.

The Absorption Rate is the number of months it would take for the current inventory to be consumed.  I used December sales and January active properties to calculate the absorption rate resulting in the average San Francisco Real Estate absorption rate of 1.27 months.  A balanced market is considered 6 months of inventory.  The lack of supply continues to heighten the market in SF.  The winter months are notoriously slower for inventory than spring and fall which has an impact on the absorption rate. 

The low absorption rate does not mean that everything sells quickly or at all. Home Sellers that achieve their sales goals have realistic expectations and partner closely with a Real Estate Agent for guidance on how to best prepare their homes for market. Home Buyers are paying top dollar and are very discerning in the home purchase process so the marketing strategy has to be on target. Homes that are competitively priced and staged coupled with high exposure to the market are the homes that attract the most Home Buyers typically resulting in quick and solid sales for Home Sellers.

Stay tuned as I keep an eye on inventory and absorption rates as we head into spring as that will continue to inform Home Buyers & Sellers how to best prepare for the market.

Total Inventory Available

January 22, 2018                           

Single Family Homes: 105  (1/12/18 = 90)                           

Condos/Coops/Lofts: 241  (1/12/18 = 217)                             

TIC's: 34  (1/12/18 = 18)                                                        

*The data source for my calculation is the SFMLS (San Francisco Multiple Listing Service).