Are Homes Still Selling In Pierce County?

Are homes still selling in Pierce County? The short and quick answer is ‘yes.’ Want more detailed information on the rate at which homes are selling? Read further.

Today we’ll use a data point called the absorption rate to determine how quickly homes are being purchased on the Pierce County market. The absorption rate refers to the amount of homes that are being purchased, based on the amount of homes that are on the market. The absorption rate we’ll use for this article is based on pending properties, opposed to closed (a lagging data point).

The concept of absorption rate; if 100 homes went on the market, and 40 of them sold, that would equal a 40% absorption rate. 40% of the homes were absorbed. Conversely, we can have an absorption rate that exceeds 100%, which means that homes are being purchased about as quick as they are put on the market. That was the last two years, but is not the case any more in most markets nationwide. Let’s dig in!

When looking at the absorption rate, how do we determine whether it’s a buyers or sellers market? 16.67% and below is considered a buyers market, and 33.33% or higher is considered a sellers market. The 16 - 33% range is considered a neutral market.

The end of September ’22 numbers showed that 49.2% of the homes that were listed were purchased. That number has decreased the later we get into October; as of October 23rd, the absorption rate has hit 43.8%, a decrease of 5.4%. Although we had a decrease in overall absorption rate, we are still in a sellers market, however we keep getting closer to a neutral market.

When compared to 2021, the same time frame (Oct 1st to 23rd), we saw a whopping 143.1% absorption rate! We couldn’t list homes fast enough, and chances are as a buyer you were dealing with multiple offers.

Things change when you look at the absorption rate in certain price ranges. When looking under $499k, the Pierce County absorption rate jumps to 62.7% as of October 23rd. That number changes drastically as you get to the $500k - 1,000,000 range, with 36.1% of the homes being purchased. The $500k - 1,000,000 range is close to a neutral market, and if you are a seller, chances are you are feeling that.

When shifting to the $1,000,000 to $2,000,000 Pierce County absorption rate drops even lower to 27% of the homes being purchased. This time last year in that price range? 65% absorption rate.

The absorption rate is a great way to understand the demand of the market place, and is easy to understand for buyers and sellers. If you would like to know more information about our absorption rate, feel free to contact one of our Abode agents and they will break down your area for you.

Questions? Email davidjones@windermere.com