Tucson Real Estate Absorption Rates May 2007

June 17, 2007

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Absorption Rates for April and May 2007
Tucson Real Estate Market

Area	May Listed	May Sold	May AR	Apr Listed	Apr sold	Apr AR	Sold YTD

N	820	115	7.13	851	103	8.26	502
NE	462	66	7.00	471	61	7.72	302
NW	2617	323	8.10	2668	316	8.44	1457
XNW	113	13	8.69	111	15	7.40	72
C	1349	220	6.13	1325	205	6.46	937
E	553	97	5.70	560	71	7.89	411
S	561	111	5.05	557	107	5.21	437
SE	890	134	6.64	881	108	8.16	569
SW	736	67	10.98	731	63	11.60	345
XSW	315	23	13.69	319	38	8.39	149
XS	695	74	9.39	686	69	9.94	322
W	533	59	9.03	482	63	7.65	308
XW	69	11	6.27	75	8	9.38	42
	9,721	1313	7.40	9,717	1227	8.07

Absorption rates are something we just started reporting. It is calculated by taking the number of Active Listings on the market in a given area. Dividing it by the number of homes sold in that area to determine the number of month it would take to sell existing inventory at this rate. Example:

100 Active Listings
10 Homes Sold
10.00 months inventory

By reporting absorption rates it take into account two important factors that aren’t accounted for in other methods such as Days on Market, or Year over Year reporting of the number of listings, or total units sold. The two factor are:

More homes are being built all the time.
More people are moving into the community all the time.

XS, SW, W, XNW decreased absorption

It is interesting to note that the three areas where the absorption rate increased are adjacent to each other the XS, XSW, W. Throwing in the XNW into this category as well; these areas saw an increase in the number of months.

All other areas increased absorption

All the rest of the areas saw a decrease in the number of months to absorb the inventory with the E and SE seeing the greatest drop in months.

Over All

The market seems to have made some gains this month with an overall absorption rate of 7.40 months compared to 8.07 last month. This is consistent with the increase of sales activity in the market.