Lamorinda Real Estate

Lamorinda Real Estate - Absorption Rate

Real estate is local, even down to the street. So to combine three communities when talking real estate is certainly generalizing. But Lafayette, Moraga, and Orinda, the combined Lamorinda area, stands apart from the surrounding areas in real estate values.
    In recent posts I gave the individual absorption rate numbers for each community. Today I will combine the three to give an overall reading of the Lamorinda real estate market.
    Last year had sales of 657 units from January 1 through December 31. That gives us an average of 54.8 units sold per month. The current inventory in Lamorinda is 142. Working the numbers we find that the current supply stands at 2.6 months.
    Looking a little deeper we find the current supply of detached homes is 2.2 months, and the current supply of condos and townhouses stands at 7.3 months. This points to a buyers market in the condo and townhouse arena. The 2.2 month supply of detached homes still leans toward a sellers market, if you believe the common thought of 5 months as a balanced market.

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Lafayette, CA Real Estate - Absorption Rate

 

  In the last 2 posts I’ve given you the Absorption Rate (AR) numbers for Orinda and Moraga. Today let’s take a look at Lafayette.
    Lafayette, for the year 2007, produced 295 residential sales. This gives us an average of 24.6 sales per month.
    Currently Lafayette has 64 properties on the market. If we divide 64 by the AR of 24.6, we find that Lafayette currently has a 2.6 month supply of homes.
    According to general real estate consensus, a 2.6 month supply is considered a seller's market. Read the Moraga Absorption post from yesterday to see some implications for a seller's market.

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Moraga Real Estate - Absorption Rate

Yesterday I looked at Orinda’s current market through an analysis called absorption rate (AR). For a definition of absorption rate, see yesterday’s post. Today I’ll plug in the Moraga numbers. Moraga requires a little different approach. Moraga has more condos and townhomes than Orinda, so I will differentiate between detached homes (DE) and condos-townhouses (CO & TH) for Moraga.

Let’s take a look first at the DE market. Last year, 1/1 – 12/31, 101 homes were sold. 101 divided by 12 months gives us an absorption rate of 8.4 sales per month. There is currently an inventory of 10 houses on the market in Moraga. If we then divide the current market of 10 by 8.4, we see that there is a 1.2 month supply of houses on the market in Moraga.
    Now let’s see the CO & TH numbers. Last year produced 68 sales, which gives us an AR of 5.7 sales per month. With a current inventory of 24, we have a 4.2 month supply of condos and townhouses.
    The DE market tells a different story than  the CO & TH market. The DE  market is more of a seller’s market, where as the CO & TH market is just on the seller’s side of a balanced market.
    When selling in Moraga it is very important to take these numbers into consideration. Your initial asking price is very important in getting your house sold for top dollar.
    When looking to buy a detached home in Moraga, be ready to write an offer quickly (see “Buyers Topics” in the sidebar of this blog) if you see a house that fits your needs and is priced right when it initially comes on the market. You would be best served by getting emails of properties that fit your parameters sent to you instantly as they come on the market. That way you can notify your agent (Me) to check into the property more closely and you can also see it within a couple of days of its arrival on the market.
    CO & TH buyers have a little more time with a 4.2 month supply on hand, but should also be ready to write an offer if they see what they like.

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Orinda Real Estate: Buying or Selling - Using the Absorption Rate

One way of analyzing the Orinda Real Estate market, either as a buyer or a seller, is by looking at the Absorption Rate. The Absorption Rate is the ability of the real estate market to sell off all of the houses that are currently for sale. The number given usually represents the number of months it would take to sell off the currently available inventory. Simply put, if 12 homes sold in the last 12 months in a given market, that means that the market will absorb 1 house per month on average.  If there are 10 homes currently on the market there is a 10 month supply.  A 6 month supply is a balanced market. Less than a 6 month supply is generally considered a sellers market, and more than 6 is a buyers market.
    If we look at January 1, 2007 through December 31, 2007, we find that the Orinda Real Estate market had 180 sales. 180 / 12 months = 15 houses per month on average sold in 2007.
    There are currently 30 houses on the market in Orinda. If we take 30 and divide by our average of 15 houses per month selling based on 2007’s sales numbers, we see that there is a 2 month supply of houses currently on the market. This points to a definite seller’s market in Orinda, based on the assumption that a 6 month supply is a balanced market.
    This formula can be broken down further a couple of different ways. You can choose a shorter time period to reflect the direction the market is trending. You can also choose a specific price range or neighborhood to analyze. This exercise is very helpful in analyzing price trending and will give you more comfort in making an offer to purchase, or setting an opening offer price.
    Of course, I am happy to help you with these figures specific to your needs. Contact me any time.

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