The final numbers for February were released by the Realtors Association of Edmonton the other day. Inventory, compared to last year is lower, and so far is increasing at a slower rate, but it is still much higher than normal:
The biggest difference between this month and last month seems to be the absorption rate, which has dropped from 9 months (very high) to 6.6 months (closre to the normal range). The absorption rate gives you an idea of how many months worth of inventory are on the market (if sales continue at the same pace).
I still say absorption rate is a weird statistic. If your glass is half-full, you could say inventory dropped from 9 months in January to 6.6 months in February. If your glass is half-empty, you could say February 2009 had the highest absorption rate in February on record (at least back to 2003). Simultaneously, both comments are very objective and yet very opposing.
I think a better indicator of trends would be to build a 12-month rolling absorption rate.
Good day.
Would you have the price per square foot chart for February?
Thank you.
It is statistically impossible for the absorbtion rate to fall as dramatically it it has based on the very low sales for January so the real story is alot of listings must have expired.
If the absorbtion rate is based on listing time to sales date it doesn’t tell us much as we know in February the number of houses sold was almost equal to the number of expired listings. Many of the expired listings are then listed with other realtors (or they become com-free listings). So a house that has been listed for 8 months may well have actually been listed for 1 year 8 months, ust in two seperate listings.
In a sellers market this statistic would have relvance as there would be enough churn to mitigate the expired listing factor but in this market isn’t too relevant.
Basically it tells us that 800 houses that had been on the market for a long time have not sold and therefore are no longer listed. Not that market churn is increasing