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Delving Into How the Absorption Rate Affects Our Market
March 02, 2020 at 10:58am | Kelly Fischer
How does the absorption rate affect our market and influence buyers and sellers?
First, let’s define what it is. The absorption rate is the percentage of homes that are selling compared to the number of listed homes. In our area, the absorption rate is pretty low at the moment—only about 12%. Typically, we’d say this indicates a buyers’
market, but we’re also seeing historically low inventory levels, which is offsetting this low rate.
There are a lot of would-be buyers out there who will buy if they find the trifecta: a home with a great price, condition, and location. This is a hard thing
to manage. Let’s face it—not every property is priced properly, in great condition, or settled in an amazing location.
If you’re a seller, this means you must compensate for the factors you can control to get a buyer to select your property over the competition. We sometimes see homes sitting on the market for a long time, and all this means is they’ve misfired on one
or more keys of the trifecta.
It’s pretty easy to do this. If your property is in a challenging or compromised location or needs some work done on the inside, for instance, then it has to be better priced than the properties that don’t have these drawbacks.
Don’t get confused by our low absorption rate. A lot of properties are selling, and my team and I have sold many high-end properties recently because numerous sellers have struck the right balance between condition, location, and price. When you can balance those three keys, your property will sell.
Whether you’re a buyer or seller, it would be my pleasure to meet with you and talk about the market. Specifically, if you’re a seller, we can discuss how to overcome certain obstacles and make sure your property is the one that sells. Just give me a
call or message me on my website. I look forward to hearing from you.