Is It The Right Time To Buy Or Sell A Home In Foothill Ranch? Foothill Ranch Inventory Levels

Is It The Right Time To Buy Or Sell A Home In Foothill Ranch? Foothill Ranch Inventory Levels

Should I Buy/Sell Now? This question is one that I encounter often (maybe most often) and it generally requires a complicated answer that is unique to your particular circumstances. In other words, you may have very compelling reasons that require you to buy a home in Foothill Ranch or sell a home in Foothill Ranch that have nothing to do with the market forces in play.

Start With Market Analysis: Really the question is... all things being equal, "is this a good time to buy (or substitute "sell" if you are on the selling side of the equation)?" Again, a complicated question but one of the best places to start is by analyzing inventory levels and absoprtion rates here in Foothill Ranch. Working from general to specific we can determine if it is a good time to buy or sell here by analyzing absorption rates across price ranges. From that starting point we can get more specific and therefore more relevant (Note: If your chosen real estate professional is not approaching things from this type of analytical standpoint then that sinking feeling in your gut is no accident). The overall absorption rate in Foothill Ranch at this time is 9.41 months. Solidly in "Buyer's Market" territory. Across price ranges categories, though, we see some that are much more favorable to sellers than an overall absoprtion rate of 9.41 months first indicates.

Hey Dave... What Are Absorption Rates Anyway? ( Absorption Rate 101 - Why Inventory Levels Matter!)

(# Homes Available includes Active listings, Backup Offer status listing and Pending Sales. This is a very conservative approach from a selling standpoint but one that I find is most transparent. By simply using "Active Listings" alone the numbers can be skewed to appear more favorable to sellers.)

What Conclusions Can We Draw From This Data? Right off the bat something becomes very clear... homes at either extreme of the market are overabundant relative to the rate at which they sell. If you are looking to buy a home over $600k or under $200k in Foothill Ranch you've got a wide array of choices and some significant bargaining power. If you are selling a home in these ranges you may need to re-evaluate the price you are seeking and/or withdraw your home from the market (Now, how often have you heard a Realtor say that?)

Some Bright Spots: The healthiest segment of the market in Foothil Ranch lies between $300k and $600k . Not surprising... this has been the healthiest range with the highest demand for several years now. In fact if you remove attached homes from the $300,00 to $399,999 range the current absorption rate is 4.5 months (just about in to solid "Seller's Market" territory). The $500,000 to $599,999 range is staunchly in "Neutral Market" status and favors neither buyers or sellers (Homes that sold in this price range ranged from 2,043 square feet to 2,865 square feet during the last three months).

But My Home Is Worth More! This applies to sellers of course and your home very well may be worth more (I sold my highly upgraded Vintage Gallery home in 2010 for $716,000; considerably above market and still the highest sale in the tract for the last four years). Analyzing absorption rates is just a guide to help you price your home correctly (or determine that now is not the time to sell). Simply a starting point in evaluating a solid listing price. Your home may have particular amenities (location, upgrades, view, etc.) that make it more valuable. Or; conversely special conditions (Short Sale, etc.) may apply that drive the market value of your home down. Make sure you aren't thinking with your heart though! All of my clients (buyers and sellers) have found this analytical approach useful.

Got Analysis? Your real estate professional should be using sophisticated market analysis to assist you with list price (sellers) and offer price (buyers) decisions. Is yours?