Our managing broker just put out this memo. Interesting:
I’ve been asked by a local bank to give a presentation in 2 weeks on the Louisville residential real estate market.
In planning for this presentation I’ve looked at the current absorption rates across the market as a whole and in the high end. What I found is pretty interesting and thought you might find it helpful (particularly when discussing with sellers who have high-end listings that aren’t selling quickly):
Again, the absorption rate is defined as the amount of time it would take to deplete the current amount of inventory based on what has sold in the past 12 months. A balanced market, equally favorable to sellers and buyers, is 6 month’s worth of inventory. Less than 6 months inventory is a seller’s market. More than 6 months is a buyer’s market.
· Louisville Market As A Whole (All price ranges) – Approximately 2.5 months of inventory. Seller’s market.
· Houses $500,000-$999,999 – Approx. 9 months of inventory. Buyer’s market.
· Houses $1 MM - $2 MM – Approx. 22.5 Months. Significant Buyer’s market.
· Houses $2 MM+ -- Approx. 138 Months (or 11.5 years!!)