Demand Surges in JC & Hoboken

Determining the level of housing supply is fairly easy and rarely requires any computation. Demand can be more elusive to track, but there is a traditional method of determining demand that is useful for today's market - The Absorption Rate. Take the number of homes currently on the market and divide by the number of homes that go under contract in 1 month. This ratio will determine the number of months supply remaining. Simply put, if another home never got listed again, how long will it take to sell every home on the market. Although that is not a perfect science, it does still provide insight on selling speeds, and thus, the general level of demand.

For context, anything less than 5 months of supply is traditionally considered to be a seller's market. Given the vast optionality of rentals in our area, a better figure for determining a seller's market would be 4 months of supply.