Scenic Hunterdon County
How can you gage market conditions in a specific area?
One way is the Absorption Rate. This is defined by dividing the number of properties available by the number that has sold in the last month for a given area. An example might be if there are 100 properties available in a market and 10 have sold in the past month - the Absorption Rate for that particular market is 10. This indicates that based on these statistics it will take 10 months to sell the current inventory (if nothing else was to come on the market).
An average Absorption Rate is considered to be 5 to 6 months. Less than this is considered a seller's market (prices increasing) and more to be a buyer's market (prices decreasing).
Statistics compiled at the end of May 2010 show an overall Absorption Rate of five months for Hunterdon County in New Jersey.
The lowest area, Califon, had an Absorption Rate of just over one month and the highest was Milford with twenty-three months. While you could argue that some of these computations did not have enough statistics within them to be representative, in general they are considered one barometer of how a particular market is doing.
And, this Absorption Rate is broken down further for the Hunterdon County by price point. In this example the single family homes under $300,000 had an Absorption Rate of just over four months and those over a $700,000 had an average Absorption Rate of nearly eleven months. The price points in-between showed several weak spots with one price point in excess of twenty-nine months.
Milford Boro, Bloomsbury, Hampton, Stockton and W. Amwell all had less than three sales.
Then, you could also break these numbers down even further to show price point within area and the resulting Absorption Rate (these figures could even be taken down to specific developments).
This Absorption Rate is not the only factor in measuring the market conditions for a specific area, but they are a fairly good indicator.
You can visit my site at http://www.jpeters.com/ and go to the local market update tab to learn more and to see the specific numbers that were compiled.
Become a fan on Facebook at bit.ly/jpetersfb to receive periodic market updates.
Your local "Neighborhood Specialist" focused on the Hunterdon, Somerset & Warren County areas. As a Licensed Weichert Agent, I can assist you in locating a new property or marketing your current
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