Newton, MA multi-family residence market report September 2011 – Absorption Rate

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Newton, MA multi-family residence market report September 2011 – Absorption Rate

On October 3rd there were 34 multi-family residences listed for sale in Newton, MA according to the multiple listing service data (MLSPIN).

Absorption rate is a calculation of how many months of housing inventory are on the market based on historical rates of sale per month and the current housing inventory. What this tells us is how long it would take to sell all of the houses currently on the market if no new houses came on the market. This is useful as an indicator of the state of the market, and it constantly changes as new homes are listed and existing inventory is sold.

A Seller’s market is considered to be 1 to 4 months supply of housing
A Neutral market is considered to be 5 to 6 months supply of housing
A Buyer’s market is considered to be 7 or more months supply of housing
Let's look at the chart.

Newton, MA multi-family residence market report September 2011 – Absorption Rate
 From the chart we can see that the majority of multi-family residences in Newton MA are priced from the $400,000s through the $700,000s. The absorption rate shows that the market is slightly towards a buyer's market for the mid-range properties.

Some of these mid-range multi-family residences are greatly overpriced, and will not sell, and will likely get few, if any, offers. A few of them are in the right price range, but not for the condition they are in. These will sell if the sellers are willing to adjust their price to meet offers.

Of the five multi-family residences on the market, there are 2 with two-units, and 1 each with three, four, and five units. There are so few units in the price range of the $800,000s and above that the absorption rate is 12 months or more. For units over $1,000,000 there has not even been a sale in the last 12 months, so there is no absorption rate calculated. These multi-families will be bought by investors, if the rising rents in the area justify the prices.

In summary, although multi-family residences are about a quarter of the total housing in Newton MA, they are less than ten percent of the current real estate market. They are mostly owned by investors, and do not reach the market as often as single-family residences or condos, so buy them when they are available.

Debb Janes
Nature As Neighbors - Camas, WA
Put My Love of Nature At Work for You

Nice one Melissa - *Team Ostrom - Capps*

 This is a very thorough and honest market report that explains what it takes to get a house sold in Newton, but also what buyers need to know in making a smart purchasing decision. You have showcased the importance of hiring a good team to represent your interests as a seller and as a buyer. I would say "you're the team of choice in Newton, Massachusetts.

Oct 12, 2011 06:34 AM
MichelleCherie Carr Crowe .Just Call. 408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Good report. Also, thanks for reading and commenting on my blog about Redfin. Will you be on the webinar tomorrow at 9am?

Oct 16, 2011 08:04 PM
Michael S. Bolton
Michael S. Bolton,Inc. - Zimmerman, MN
MN Appraiser

Hi Melissa,Is that a report you put together yourself, or is that something your MLS does for you. Being a numbers person, I'm always looking for better ways to enhance my appraisals. Thanks.

Oct 22, 2011 07:24 AM