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Gig Harbor, WA real estate absorption rate

By
Real Estate Broker/Owner with Fathom Realty Colorado

Statistics don't lie.  You can make them say just about anything you want, so they can be very deceiving, but they don't lie.  Real estate is full of statistics.  One of the numbers that I find to be important is what is referred to as "Absorption Rate," the rate at which the market could absorb all of the houses currently for sale.  To calculate this number, I look at how many homes are currently on the market, and divide that number by the number of homes that sell each month.  If, for example, there were 600 homes on the market, and 50 sold each month, it'd take 12 months for all 600 homes to sell (be absorbed). 

Rambler for sale at $329,000

Looking specifically at Gig Harbor real estate, there are currently 517 homes on the market in Gig Harbor.  Averaging November and December's numbers, we are selling 26 homes per month.  That means our absorption rate is 19.9 months.  If nobody else put their home on the market in Gig Harbor, and houses continued to sell at their current rate, it'd take essentially 20 months for all of the houses for sale in Gig Harbor to sell! 

That's an important number to keep in mind when you are thinking of selling your home.  Does that mean that when you list your home, it's going to take a year and a half to sell?  Of course not.   It means that you had better seriously consider your home's condition, the price that you're asking, and the terms that you're willing to accept when you put your home on the market. 

Let's say for example there are 25 homes on the market in the $385,000-$400,000 price range, the range you believe your house falls in.  If you put your house on the market and it's not in pristine condition, or you price it at $399,900 because you're sure it's nicer than those other homes, chances are you'll still be sitting on the market in several months because not only do you have the 20 months worth of absorption, but you've got new houses coming on the market each week pushing yours further back.  If on the other hand you have your house in tip-top shape, priced closer to the bottom of that price range, your house will be the one that attracts the buyers, leaving the other houses to wallow on the market longer.

Terri Hills for $509,000

20 months is a big number for an absorption rate.  It doesn't mean houses aren't selling and it doesn't mean that you can't get a good price for your home.  It simply means that you'd be wise to invest some time preparing your house for sale and researching the market to best price your home.  I'd be happy to share with you some tips that I've learned to make sure your home is in its best condition, and I'd be happy to give you a professional market evaluation to give you a good idea of what your home's current value is.

Comments (1)

Ryan Allie
Living Puget Sound - Des Moines, WA
Creating Your Puget Sound Lifestyle
Matt, great post. I try to pass this info onto my seller to give them a perspective of what needs to be done to sell a home. Some get it, and some don't. I do believe it is valid if you want to be competative in this market. I also believe it is a good test for me to find out how serious sellers are. 
Jan 15, 2008 07:33 AM