Absorption defined for the purposes of this chart as: Number of months to sell all listing inventory at the annualized pace of sales activity.
It comes as no surprise by now that the lower price strata of the market is doing better than the upper end, primarily because of the divergence between jumbo and conforming mortgage underwriting requirements. Absorption has been better in the sub-million price strata than above $1M over the past year.
In other words, the surge in sales over the summer has increased the pace of absorption. The pace of sales increased relative to the amount of listings offered.
It appears that the trend is moving higher up in the price strata since absorption between $1M and $2M has improved in recent months. However, west side absorption for condo units has deteriorated on the west side with more new product entering the market than can be absorbed (especially sub-$500k).
I’ll update these charts monthly and have already created an archive. This chart does not include shadow inventory (properties ready for market but not yet listed for sale) so it understates condo absorption.