Pricing To Sell in St. Charles, IL: Consider the Absorption Rate

Industry Observer with Swanepoel T3 Group

Homeowners in St. Charles, IL who are thinking of selling their home need to consider the amount of inventory that they will compete with. Inventory sounds like boxes in a warehouse, but a successful seller needs to "think like a buyer" who is evaluating all the choices he has on the market. Realtors speak of "inventory uptake", or "absorption rate" which is the number of days or months or years it will take to sell off the current inventory at the current rate of sales.

Let's look at a real price point in St. Charles, IL: homes priced at $450,000 to $600,000. There are 109 active listings and 10 under contract. There have been 50 closed sales in the past six months. The absorption rate is 13 months, the amount of time it will take to sell off the inventory at 8.33 houses per month.

The analysis of the closed sales shows even more relevant data. A good proxy for value in a problematic market is assessed value (what the tax assessor says your home is worth). The assessed value of the closed sales shows that the houses that sell have an assessed value proportionately greater than the listings still on the market.

Houses at this price point in St. Charles, IL sell when they are priced at about 80% of assessed value. Put more simply, when a house sells for $550,000, it is a home valued at $700,000. The absorption rate of houses priced at 80% of assessed value is 30 days. The absorption rate of houses priced at 100% of assessed value is 10 months. Unfortunately, the absorption rate of houses priced at 120+% of assessed value is pretty much "never".

If you are thinking of selling your home in St. Charles, IL, you should know the absorption rate for your price point. All real estate is local, so if you would like help figuring out what your home is worth, and what you should do to sell it in today's market, give me a call and let's talk.


Homes Sales in St. Charles, IL

Dynamic Chart Shows 3 Years of Sales Data

Comments (10)

Glenn Roberts
Retired - Seattle, WA

The absorption rate is good data to take with you to a listing appointment. Sellers are too aware of national articles that they like, but their specific neighborhood hold the key the the value of their home.

Oct 19, 2010 03:12 AM
Leslie Ebersole
Swanepoel T3 Group - Saint Charles, IL
I help brokers build businesses they love.

Glenn, thanks for the reinforcement. I am working on simplifying the real estate jargon in my materials. I will also be turning this into a handout for the seller package.

Oct 19, 2010 03:22 AM
Denise Hamlin, Broker/Owner
Cardinal Realty ~ 319-400-0268 - Iowa City, IA
Helping Happy Clients Make Smart Choices

Hi Leslie ~ Absorption rate is a tough one to explain. Good job in breaking it down in a way that non-real estate professionals will understand. Interesting how the assessed price plays into the time on market too. As Glenn says, real estate is local. Ultimately what's going on in the national market is of little relevance to the buyer or seller's local area. For anyone moving the St Charles, IL area this is the kind of data they need.

Oct 19, 2010 03:35 AM
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Good advice, Leslie.  I've started feeding assessed values into my CMA pricing formula. 

Oct 19, 2010 03:41 AM
Ken Tracy
Coldwell Banker Residential - Naperville, IL
Helping clients buy and sell since 2005

Hi Leslie. I am always impressed by your posts.

Very clean and professional...

Thanks for writing,


Oct 19, 2010 05:07 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Supply and demand.  You've done a nice job "illustrating" the point.  :-)

Oct 19, 2010 06:54 AM
Rich Edgley
Greater Chicagoland Home Inspection - Saint Charles, IL


You are on fire with your blogging.  I finally got a chance to sit down and read.  great work.


Oct 24, 2010 11:29 AM
Lisa Orme
The Master's Key Realty LLC -Windsor, CT - HARTFORD COUNTY - Windsor, CT
Broker/Realtor, ABR, CRS,GRI, PSCS, SFR, Notary Pu

Nice job on absorption rates - and your graphs are WONDERFUL for getting your points across. Nice job! 

Oct 24, 2010 03:56 PM

Thank you for this!  Where did you get your charts from?

Dec 30, 2010 03:04 AM
Leslie Ebersole
Swanepoel T3 Group - Saint Charles, IL
I help brokers build businesses they love.

#9; I see that the Altos Research chart is missing. Dont' know why the link is broken. In any case, go to Altos or send me your email address and I can get you all kinds of charts!

Dec 30, 2010 04:23 AM