NOTE--this post appeared a year ago on my other blog and I'm just putting it here for sellers to understand the market better. I will revisit absorption rate and update theses numbers this week. It'll be an interesting comparison. I know Midtown Columbus, for example, has considerably more homes on the market now than last year at this time.
Although many sellers expect Realtors to carry around a crystal ball and peek into it when setting prices and setting expectations for the sales process, the truth is we can only rely on what the market tells us, experience and knowledge.
One tool sellers can use to estimate time on market and temper expectations is Absorption Rate.
To calculate Absorption Rate, divide the number of listings by the number of sales during the last month. Currently, the Columbus real estate market has 17,186 homes and condos on the market. From April 17th to today, 2197 homes or condos have sold, making the absorption rate 7.82. While certainly not scientific, it is a decent off the cuff barometer of what to expect in a market. An average seller in Columbus can expect that, if there were no more new listings, that it would take 7.82 months to sell all the current listings on the market. That's up an entire month from about 45 days ago when there were about 1200 fewer homes available.
Let's take a quick look at the absorption rate for some different markets:
- Upper Arlington ohio homes - 6.2
- Bexley ohio homes - 5.8
- Greater Olde Towne East homes - 10.63
- Westerville ohio homes - 6.49
- Worthington ohio homes - 6.59
- Grandview ohio homes - 3.5
- Downtown Columbus Condos for sale - 5.75
It goes without saying that all homes are not created equally. Nor are they priced equally well. In today's tougher seller's market, Sellers must have realistic expectations of selling price, time on market, and what to expect throughout the process. Their homes have to be clean, clutter free, smell free and as well cared for as possible.
May 17th, 2006 categories: Real Estate News, For Home Buyers, For Home Sellers, Market Updates
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