Now YOU can calculate the “months’ of supply” data for just about every neighborhood in the Lake Norman area right here, 24/7!
If you look on the homepage under Lake Norman Real Estate Tools , you will see a new button: Calculate Months of Supply. When you click on this link you will find a blank box where you can type in any neighborhood or subdivision found in our Charlotte Regional Multiple Listing Service. Once you start typing it will auto-prompt some options for you. When you are finished, simply click on “Show me Stats” and up will pop a chart with the number of sales, the number of active listings and the months of supply. VERY COOL!
If you are a regular reader, you will know that I calculate the “months of supply” or what is officially called the “absorption rate” of our Lake Norman housing market every time I do any kind of market analysis. This is because it is one of the best barometers of any real estate market, locally or nationally.
Simply put, the Absorption Rate is a basic mathematical formula used to determine how many months it will take to sell the current number of active listings based upon the present rate of sales.
Economists say that a balanced housing market should have 6-8 months of supply of active listings. An absorption rate higher than 8 months would indicate a buyers’ market. An absorption rate lower than 6 months would indicate a sellers’ market.
How to manually calculate the absorption rate:
Take the number of homes currently on the market and divide by the most recent 30-day number of sales.
Our number of currently active listings in Lake Norman is 1150. We sold 65 homes this month so:
1150 divided by 65 = 17.7 months of supply
Clearly in this example we are in a very strong buyers’ market.
If you have any questions please feel free to email me: firstname.lastname@example.org.