Understanding Absorption Rate in Real Estate: A Look at Charlotte's Market in 2023

Hello everyone, I'm Maureen Mahood, broker of SellYourHomeCharlotte.com. Today, we're going to delve into a key concept in real estate - the absorption rate. This term might sound complex, but it's actually quite straightforward and crucial to understanding the dynamics of the housing market.

The absorption rate in real estate refers to the rate at which available homes are sold in a specific real estate market during a given time period. It is calculated by dividing the total number of available homes by the number of sales per month. The figure shows the rate at which the supply of homes is being absorbed by buyers.

Now, let's take a look at the current state of the Charlotte real estate market. According to reports, the number of new listings in June 2023 declined significantly by 31.2% compared to the previous year, with a total of 3,736 new listings. This reduction in inventory suggests a potential shortage of available properties entering the market, potentially impacting buyer choices and pricing dynamics.

This situation indicates a lower absorption rate, meaning the demand for homes is higher than the supply. In such a scenario, it's a seller's market because homes sell quickly due to high demand.

On the other hand, if the absorption rate is high, it means homes are not selling as quickly, and supply exceeds demand. In this case, it's a buyer's market because buyers have more options and more time to make decisions.

Understanding the absorption rate can help both buyers and sellers make informed decisions. For sellers, a lower absorption rate might indicate it's a good time to sell as homes are in high demand. For buyers, a higher absorption rate could mean more options and potentially better prices.

Remember, real estate markets can fluctuate, and the absorption rate can change based on a variety of factors. It's always a good idea to work with a knowledgeable real estate professional who can provide guidance based on current market conditions.

Thanks so much for reading, and as always, make it a great home selling and buying day. If you ever have any questions at all, feel free to reach out, and I'll be happy to help.

Sources:

Norada Real Estate

WCNC

Axios Charlotte

Charlotte Magazine

Surge.AI