I’m sure you’ve heard that there is currently a scarcity of housing inventory virtually everywhere especially on Long Island in both Nassau and Suffolk Counties. The statistic you possibly are NOT hearing about, however, is that there is a significant increase in activity, with many more homes going into contract than ever before.
So to put it a different way, inventory is DOWN while the pace of sales is UP! When that happens, something called the “absorption rate” declines quite drastically. The absorption rate is no more than the number of months to sell ALL the homes on the market. For example, if 100 homes were on the market and 100 homes sold over the past year, that would be a 12 month absorption rate. If however, 100 homes were on the market and 200 homes sold over the past year, that would be a 6 month absorption rate.
A normal market, that is a market favoring neither the buyer nor the seller holds a 5 to 6 month supply of housing. An absorption rate higher than 6 months is a “buyer’s market” while lower than 5 is a “seller’s market.” You can see this quite plainly in the chart just below.
With a clearer understanding of what the absorption rate means in housing, I’m sure you can see from the following chart just how strong a seller’s market it is in Nassau County right now for single-family homes!
As you can see, although absorption rates are up slightly in July 2021 over prior months, the rate remains low and it remains a very strong seller’s market. The main reason for the slight tick upward for the absorption rate is the extreme lack of inventory and not a lack of demand.
What this should mean if you are thinking of selling your Nassau County single-family home: The time to think is over! It is time to act and act swiftly before more sellers discover what you now know. The absorption rate has never been lower than I can remember in my 21 years as a licensed real estate salesperson. And there’s just no telling how long this seller’s market is going to last.
Call or text me at 516-429-9399 if you would like to know about market conditions and the absorption rate in your town or what your home could bring in today’s market, without any obligation – of course!