What is an Absorption rate and why should I care?

When pricing a home in today's market (or any market for that matter) it is important to know what an Absorption Rate is for the property in question.

Absorption Rate: The average number listings sold in the market per month over the previous 12 months.

*Keep in mind this will vary due to property size, style and location. Single family homes, condos, development locations, condition etc. all have different absorption rates.

It may be helpful to follow the guideline below when pricing your listings:

Absorption Rate

+

I want my house sold now! (When you need to sell)

+

My neighbor down the street sold their house in ___ days and mine is sooo much better than theirs! (Market Comps)

+

I don't want to give it away! (What you want to settle for)

+

I have to get $________ or I can't afford to sell! (What you need to settle for)

=

Price!

A 6 months absorption rate is typically when the market in not a buyers or sellers. A rate of less than 6 months is a sellers market and more than 6 a buyers.

If you are wondering what the absorption rate is in your market call me at 609-352-1667 or email me at bridget@sjrealestateonline.com today!

Bridget Cella

Weichert Realtors