Absorption Rate in Tequesta Up for the 2nd Straight Month to New 8 Month High

Absorption Rate in Tequesta Increases by 6.7%

There is no doubt that those of us who practice real estate are drawn by the constantly evolving market that keeps things interesting. Much like a physician we have “charts” that we can read to determine the health of the market. Over the past year these charts have shown for the most part a very healthy market with little reason for concern. Inventory levels shrank month over month while sales strengthened leading to prices rising for the first time in 7 years. Interest rates were at historical lows and all was well but then something happened.

The Fed jumped in and stated publicly they were going to start scaling back on their purchases of our national debt instruments. They had been buying these bonds and treasuries like crazy over the past years to the tune of almost 3 trillion dollars. These purchases were designed do keep interest rates at artificially low levels hopefully spurring an overall economic recovery. There is no doubt this stimulus played a huge role in the strength of the market over the past year. But as soon as the Fed said they were going to scale back interest rates jumped; and significantly. Interest rates increased each week for a record 11 straight weeks jumping over 32% as the rate on a 30 year fixed conforming loan moved from 3.42% to to 4.52%.

It is hard to say the increased rates started a reversal in market strength but there was a shift. Frustrated buyers unable to find suitable opportunities with inventory levels that continued to fall also played a role. But something changed and three months ago we started to see sales pull back from record levels. Inventory levels started to climb and sales last months in some areas hit 18 month lows. Some signs point to overpriced inventory more to blame than waning demand but there is no doubt something is shifting and not for the better.

As sales have stalled so have price increases as month over month numbers show little change and in some neighborhoods we are seeing declines. Any respected physician knows a patient’s charts very well and this is precisely why each month we look at our “chart” to see what signs we see for the health of the absorption rate in Tequesta and our other local municipalities.

The trend of these numbers shows buyers what they can expect in choices when they start shopping for the perfect Florida home. We base this number on how long it will take the market to absorb all of the homes on the market if sales levels over the prior 30 days remain constant and no other listings are added to the market. We look at the absorption rate which includes pending and contingent listings as it gives us a truer picture than the inventory level which eliminates those listings. The absorption rate will always be higher than the inventory level. So let’s check in on the absorption rate in Tequesta and her neighbors to see what has changed since the last numbers we published on October 5th.


Absorption rate in Hobe Sound –
Absorption rate in Jupiter-
Absorption rate in Palm Beach Gardens –
Absorption Rate in Tequesta – 10.14 months up from 9.5

Last month at this time we reported that 100% of our reporting municipalities showed increases in their absorption rates with the average absorption rate sitting at 7.76 months which was a significant bounce from what had been 7 year lows. While an increase off of record lows is not unusual the bounce we experienced last month was a big one. This month we have 75% of our towns and villages again show increases, mostly minor, with the average moving higher by 5% to 7.985 months. However we again hit the highest level we have seen in some time.

We start this months report with the absorption rate in Tequesta where we saw a 6.7% move to the upside. An 5% decrease in final sales numbers combined with a 2% increase in inventory levels brought the absorption rate in Tequesta to 10.14 months up from the 9.5 months we reported last month. With this increase we jumped higher than the 12 month average which sits at 9.15 months but managed to stay just below our year ago numbers when we reported 10.27 months. With these numbers the absorption rate in Tequesta hit a new 8 month high and shows this real estate doctor that something is up with our recovery. It may be just a little consolidation it may be more.

If you are contemplating a real estate transaction of any kind make sure you check in with your doctor so you know just how healthy a market you are in as it can save you many thousands of dollars. Fins up ………….


Published by

Tom Priester

After spending years among the top individual performers at one of Palm Beach County’s largest and most successful real estate brokerages, Tom Priester knew there was another way to do real estate. A better way. Real estate services focused on the customer. Like the old days when the customer truly was #1. He tired of listening to why he should be going out to have his customers sign one sided buyers’ brokerage agreements. He tired of hearing how he should be selling customers why paying higher commissions, like 7% and 8%, was to their benefit. He tired of hearing how he should sell his clients on why they should be paying hundreds of dollars in additional “transaction fees”. The business had slid way too far from being focused on the customer. His customer. So he decided the time was right to be different…..by design. To start his own unique boutique real estate firm truly focused on his customers. They will now have access to a process focused on them. Only the best marketing techniques to sell their homes. No cutting corners. Commission structures based on his clients needs not his. Paradise Sharks was born out of Tom’s passion to return this business to the customer. Where it belongs. If you want a real estate experience that benefits you, just give Tom a call at 561 308-0175 or send him an e-mail at tom@paradisesharks.com. You can always pay more and receive less but that just would not make any sense. Would it?

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