Instead of relying on general observations about the state of our market, we use a calculation called Absorption Rate to obtain hard data to determine if we are in a Sellers’ market or a Buyers’ market.
6 Month Supply = Balanced Market
Less than 6 Month Supply = Sellers’ Market
More than 6 Month Supply = Buyers’ Market
Here is our formula:
Current Active Listings/Average Number of Sales Per Month over a given time.
We did an analysis below for three areas to show that we are clearly in a Sellers’ Market.
According to today’s numbers, there is only a 3.1 month’s supply in Georgetown, 1.3 month’s of supply in Capitol Hill and 1.5 month’s supply in Arlington.