Steamboat Springs Absorption Rate Shows Healthy Market

Absorption rates are a strong indicator in determining the health of a Real Estate Market. For those of you who have heard us use this term but aren’t sure what it means: absorption rate is defined as how many months it would take to sell all the homes currently listed for sale, at the current rate that homes are selling.

A healthy real estate market is 5-7 months worth of inventory e.g. if there were 60 homes listed for sale and on average 10 homes sold per month, the absorption rate would be 6 months. An absorption rate much less that this would suggest a sellers market (demand exceeds supply, higher prices) while a rate much greater indicates a buyers market (surplus supply, greater negotiating power).

In Steamboat Springs the absorption rates have shown some fluctuation, but the latest figures indicate a healthy market overall:

Being that Steamboat Springs has such a diverse real estate market, it is important to narrow down absorption rates to more specific segments of the market and/or price points. For our purposes shown above we look at the three main areas within the city limits – Fish Creek, Mountain and Downtown areas. Then we narrow it down by property style and price bracket.

If we were to look at the absorption rate by neighborhood alone, we can see if particular areas of town are in higher demand than others. As you can see below, the downtown Steamboat area remains popular with buyers.

– Downtown (Old Town) area = 5 months
– Fish Creek Falls area = 7 months
– The Mountain area = 6 months

Overall, prices are on the rise in Steamboat Springs and the demand is here. If you have any questions, please don’t hesitate to give me a call.

Charlie