Absorption Rates In Central Alberta

What are absorption rates and why would you want to know about them?

Quite simply the absorption rate is a number shows the rate at which the inventory of homes for sale are being sold. A declining figure indicates people the inventory is decreasing as more homes are being sold than are coming onto the market. A rising absorption rate implies that there are more homes coming onto the market than there are buyers willing to buy at the market prices.

The absorption rate lets you know how well the market is absorbing the current inventory of listings. The ultimate question the absorption rate answers is, "Is the current inventory level shrinking or growing"?

Current Residential Absorption Rates:

Area: Current Active Listings Sales in September Absorption Rate
Red Deer 587 118 4.97


70 19 3.68
Sylvan Lake 248 27 9.19
Lacombe 153 29 5.28
Penhold 29 4 7.25

Almost 5 months of inventory in Red Deer at the current sale rate.  The market with seemingly the best balanced conditions right now appears to be Blackfalds, while Sylvan lake continues to struggle with large inventory volume and low sales volume.

If you're looking at selling The lower absorption rate would indicate a betetr chance or odds at selling than those communities with higher absorption rates and lower sales volume.

In Red Deer the inventory level is definitely shrinking:

Active Red Deer residential MLS listings as of September 30, 2010: 709

Active Red Deer residential MLS listings as of September 30, 2011:  591

In our supply and demand picture for real estate in Red Deer the supply of properties for sale has been declining throughout 2011.  An indicator that were have been and are transitioning from a buyers market to a balanced market.  Below is a look at weekly listing inventory levels for residential mls real estate in Red Deer

The other side of the equation being sales:

Sales have been stronger in 2011 and contributing to balanced market conditions.  Positive news for buyers and sellers.

Patrick Galesloot




Blog Archives