Absorption Rate for Naples Homes
The absorption rate for Naples homes reflects an improving market for the 4 specific time frames - 3 months, 6 months, 9 months and 12 twelve months ending June 30, 2008 for active listings as of July 1, 2008.
The 3 month time frame reflects an inventory of 22 months significantly down from the 44 months in February, and down from 25 months for May.
The 6 month time frame reflects an inventory of 28 months down from February’s 45 months and May’s 33 months.
The 9 month time frame reflects an inventory of 31 months down from February’s 41 months and May’s 34 months.
The 12 month time frame shows 31 months of inventory, down from 38 months in February and 33 months in May.
Each time frame has unique characteristics affecting the number of months. The 12 month time frame includes about 1.5 months of liberal loan programs and sub-prime borrowing, as well as, the subsequent credit crisis where homes under contract (pending sales) did not close due to the elimination of loan programs, mortgage companies failing, and last minute reversal of mortgage commitments by some lenders in the months following August 15, 2007.
The 9 month time frame is affected by the aforementioned last minute reversal of mortgage commitments and issues of possible homebuyers trying to find alternate financing. In addition, it includes the activity during the winter season.
The 6 month time frame includes 3 months of seasonal activity and 3 months of non-seasonal activity.
Overall, when looking at the trend lines they reflect an improving market by their alignment with the 3 month trend line showing the lowest number of months of inventory up to the 12 month trend line showing the highest number of months. If the real estate market was not improving the various trend lines would not be falling in the order shown. The Naples real estate market for single family homes still remains a stronger buyers’ market.
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