Westport, CT Market Report - A buyer's market....or not!

By
Real Estate Agent with Berkshire Hathaway HomeServices New England Properties

One method for assessing the activity of the housing market is by calculating the absorption rate. The rate is determined by dividing the current number of active listings by the average number of homes selling each month. The resulting figure shows the number of months it would take to sell the existing inventory of active listings. A normal or balanced market would have a five to six month supply of homes. A seller's market, reflecting a limited number of homes for sale, would have a one to four month supply. A supply time of seven months or more would indicate a buyer's market. 

Supply Time           Market Description
1 to 4 months           Seller's Market
5 to 6 months           Normal Market
7 months or more     Buyer's Market

Using the preceding twelve months as a determinant for calculating average monthly sales, the current absorption rate for Westport single-family homes is 8.8 months. According to the above chart, this would indicate that Westport is currently in a Buyer's Market. However, as the case with most averages and generalizations, they rarely tell the whole story.

Westport CT Absorption Rates

Analyzing the data by price point gives a clearer picture of market activity. The overall absorption rate for homes listed at $1 million or less is 4.6 months. While a few price ranges in this segment have supply times above a normal market, there is generally limited inventory, creating a seller's market at the lower end. At the same time, there is an abundance of inventory for homes in the higher price points. There is a two and a half year supply of homes selling at $2.5 million or more. The absorption rate for listings priced $4 million or more is thirty-nine (39) months, or over three years. 

 

This data is compiled from the Consolidated Multiple Listing Service and may not always be accurate. No warranty is made as to the accuracy of this information. You should verify any information that is important to your buying.

 

Posted by

Marilyn Katz

      Marilyn Katz

    Berkshire Hathaway Homes Services New England Properties    
     203-429-1041
  Servings Westport, CT
  and the surrounding communities  

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Copyright © 2013 Marilyn Katz, All Rights Reserved

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Topic:
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Connecticut Fairfield County Westport
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Tags:
singlefamily home sales
months of supply
absorption rates
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Rainer
13,974
Megan Lincoln
New Homes in Lincoln, CA
Collection Lincoln Crossing

Thanks for Sharing!  In new home sales, we don't tend to look at data like this much - and we probably should.  Great explanation - I learned something! 

January 16, 2012 06:51 PM
Rainmaker
223,184
Marilyn Katz
ABR, e-PRO - WestportCTProperties.com
Berkshire Hathaway HomeServices New England Properties

Megan - Interestingly enough, I once read that this method was originally used for new home sales to determine how many units the market could absorb. Not sure if that's factual, but it certainly would work for that purpose.

January 16, 2012 07:11 PM
Rainmaker
583,224
David Popoff
Realtor & Property Manager, Fairfield County, Ct.
DMK Real Estate & Property Mgmt

Marilyn, this is great information for both buyers and sellers. I love the chart, how did you make it?

January 21, 2012 11:01 AM
Rainmaker
223,184
Marilyn Katz
ABR, e-PRO - WestportCTProperties.com
Berkshire Hathaway HomeServices New England Properties

David- Thanks.  I created it in Excel. It's one of the templates, under custom types. I copied it into Publisher, added the straight line and then saved it as a picture.

January 22, 2012 05:14 PM
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Rainmaker
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Marilyn Katz

ABR, e-PRO - WestportCTProperties.com
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