Medford, Somerville and Winchester Real Estate Approaches Equilibrium

t’s time, once again, to update you on what’s happening in the Medford MA area real estate market. One of the key factors I look at is absorption rates.

Absorption rate is a way to look at the number of properties currently on the market and then using the number of recent sales, allows you see how long it would take for every property currently on the market to sell if no new properties became available for sale.

Here are the current figures:

Real Estate Statistics Medford & Surrounding Cities August 2008

Medford MA Real Estate Absorption Rate

A real estate market is in equilibrium when there is 4-5 months of inventory for sale. Less than that and you’re in a seller’s market (kudos to Arlington for hitting that sweet spot!) and more than 5 months and you’re in a buyer’s market.

Please keep in mind that this is just an indicator. Malden currently has 9 months of inventory on the market, yet in the past few weeks, I’ve put 2 houses in Malden on the market and sold both in a matter of days with multiple offers. Houses aren’t commodities because each one is different, each one is priced differently and each seller has different motivations.