So your Franklin agent has gone over the recent sales data and explained the absorption
rate on your home, right? What? Your Franklin, Massachusetts listing agent never mentioned "absorption rate"? Many agents do not mention this concept but simply put it is the speed at which a property will sell and is a reliable indicator of market conditions in each price range.
In a tight market, sellers often have the bargaining advantage. Conversely, a soft market generally favors buyers. However, each property is unique and the market conditions change rapidly. Here is the guideline to determine the market conditions:
Days on market (DOM):
60-90 days = a tight market
90-120 days = a balanced market
120-150 days= a soft market
150+ days = a very soft market (excluding new construction)
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Example A: a Franklin, MA home whose price is within the $300,000-$375,000 range
There were 30 total homes both active and pending over the past 3 months in this range.
18 active= A
12 pending= B
First divide B by 3 months= 12/3= 4 This number is now our "C". C=4
To determine the absorption rate, or when this home will sell: B/3 is (C), then A/(C) = months until sold
So (C)= 4 then 18/(4)= 4.5
This home should sell within 4.5 months based on the market conditions for this price range. The only definitive way to reduce this timeframe is to reduce the price of the home.
If you would like to know the absorption rate or likely time until a sale on your home, give me a call at 508-369-5131 and I'll email you an analysis. I'd also be happy to sit down with you and explain this in person at no obligation of course!
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