It's a Sellers' Market in Sharon MA
You may have heard the terms "Sellers' Market" or "Buyers' Market" and wondered what those terms really meant. Both of these terms are determined by how long it will take to sell the current inventory of homes for sale if no new listings come on the market and market conditions do not change. This is referred to as "Absorption Rate".
How to Calculate Absorption Rate.
Step 1: Determine the rate at which homes are selling in a specific time period. For example, between November 1, 2012, and January 31, 2013 (92 days) there were 51 single family homes sold in Sharon that were listed in the Multiple Listing Service.
Take the number of homes sold (51) and divide that into the specified number of days (92).
92 
51=1.8 This means that one home sold every 1.8 days...less than 2 days on average to sell a home in Sharon MA.
Step 2: Take the number of "Active" or current homes for sale, which as of January 31, 2013, was 41 homes and multiply that number by the rate at which homes are selling (see Step 1).
41 x 1.8 = 73.8 days. It took 73.8 days to sell 41 homes at a rate of 1.8 homes per day.
Step 3: Convert this number to months.
73.8 days 30 days per month = 2.46 months. We can round this number up to 2.5 and say that the Absorption Rate is 2.5 months.
What Does that Mean?
When the absorption rate is between 5-7 months, the real estate market is considered "Balanced". That is, there are enough homes for sale to satisfy the demand to buy homes.
When the Absorption Rate is above 5 months, we consider this to be a "Buyers' Market". There is more inventory of homes for sale than there is a demand to buy homes. Buyers have more choices, can take a longer time to look at homes and be choosier about which one to buy.
A "Sellers' Market" is when the Absorption Rate is less than 5 months. There is not enough inventory of homes for sale to satisfy demand from buyers. That demand often generates multiple bids on homes that are appropriately priced. It's a Sellers' Market in Sharon MA right now because we only have 2.5 months of inventory.
As we head into the Spring market, this is an excellent time for Sellers to list their homes for sale. Buyers are eagerly looking to buy in Sharon MA. This means there will be competition for homes that are priced properly and in good condition.
If you want to sell your home in Sharon MA and would like to know the market value, call me for a Free Market Analysis. With my marketing plan and proper pricing, I can get your home sold! It's a sellers' market in Sharon MA...what a great time to list your home for sale!
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