There has recently been a few articles recently on absorption rate. I have created this spread sheet to highlight the absorption rate by price range in a community and highlight a prospective sellers price bracket. I am happy to share this spread sheet, just leave your email address in the comments and I will email to you. All I ask is if you make any improvements pass it on!!
I find showing the absorption rate and more importantly the months supply currently on the market, it sinks in with sellers that there house might not sell tommorow. It also highlights the importance of pricing properly.
This is an actual spreadsheet for Tewksbury Massachusetts. Lets take the $350,000 to $399,999 price range.
In the past year there have been 24 units sold in the past year
Take 24 and divide by 12 months... 24/12=2
That means on average there are 2 units sold per month
There are currently 17 units on the market
Divide the average 2 units sold per month into the 17 units on the market. 17/2=8.5
That means the current inventory on the market will take approx. 8.5 months to sell. Does your seller have 9 months to sell their property... and gosh what happens if you overprice.....
I have broken this down into price ranges that make sense for my area. You will have to adjust for your area. JUst remember that there are formulas in Units Sold Per Month and Months Supply and you may have to tweak the graph. Once you get it set up for a community all you have to do is enter the units sold per year and everything else will calculate. It just takes minutes before you run out on a listing appointment.
You can take it a step farther and monitor the monthly trend.
Don't have Microsoft Excel... download Open Office. It works with Excel!!
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This post was provided by Kevin Vitali of EXIT Group One Real Estate In Tewksbury MA. You can contact Kevin by email at kevin@kevinvitali.com or call 978-360-0422.
I pride myself in the quality of my work while helpingbuyers and sellers make dreams come true.
Real Estate Services in the northeast Massachusetts, around the Merrimack Valley, Southern New Hampshire including the towns of Andover, Billerica, Boxford, Chelmsford, Dracut, Georgetown, Groveland, Haverhill, Lawrence, Lowell, Merrimac, North Andover, Newbury, Newburyport, North Reading, Rowley, Tewksbury, Tyngsboro, Westford, Wilmington, West Newbury
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