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Absorption Rate is the Key to Successful Pricing

By Jeff Kessler

Real Estate Broker/Owner with Austin Homes, Realtors www.OwnAustin.com BRE# 0457133

November 24, 2007 08:50 PM

I found this great article on Realtor.com. I hope you enjoy it.
J.

Absorption Rate is the Key to Successful Pricing
Telling sellers the price they want to hear may get you the listing, but it won't sell the home, Zan Monroe, ABR®, CRB, CRS®, said during a presentation at the 2007 REALTORS® Conference & Expo on Tuesday.

Only pricing the listing right will do that, said Monroe, whose comic presentation style had the audience in stitches. And the right price depends in large part on the current absorption rate in your market. Here's how you find that: Click here to read the rest.

Here is Austin's Absorption Rate. This is from 11/01/2006 to 10/31/2007

Not to bad? For a down market. Not here in Austin Texas. Slower, yes.

Absorption Rate

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Keith Hoffman

1st Advantage Mortgage - Lombard, IL

1st Advantage Mortgage - Residential Mortgage Specialist

First of all Jeff, you need to get some sleeep based on the time I see on your post. Secondly, many times I also think that our media hasn't done a good job with the financial end of selling. I think the next peice I will blog on is financing to assist in selling homes.....Now get to sleep!

Nov 24, 2007 10:50 PM

Joeann Fossland

Advantage Solutions Group - Tucson, AZ

Master Certified Coach to Motivated Agents

Absorption rates can get the seller to become your partner in figuring out what needs to be done, instead of fighting to justify their price! Nice example + resource

Nov 24, 2007 10:54 PM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

Keith. I couldn't sleep I have a squirrel in my attic and I am trying to catch him. I keep setting the live animal trap, as once I catch him I am driving him 10 miles away and releasing him, and he keeps escaping. So I decided to catch up on some football and read AR.

J.

Nov 24, 2007 10:56 PM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

Joeanne Thanks for the compliment. Have a great Sunday.

J.

Nov 24, 2007 10:58 PM

Chris and Berna Sloan

Group 1 Real Estate - Tooele, UT

Tooele UT

Jeff... This is very helpful, and should point out that the absorption numbers that are given by area rather than individual price categories mean very little. Thanks

Nov 24, 2007 11:00 PM

Craig W. Barrett

RE/MAX 100 - Hughesville, MD

Hughesville MD Real Estate

Jeff, good post. Absorption rate is good for the agent and seller. Calculated and understood correctly, absorption rate helps bring clarity to an easily cluttered process. The more data the better.

Nov 24, 2007 11:02 PM

Keith Hoffman

1st Advantage Mortgage - Lombard, IL

1st Advantage Mortgage - Residential Mortgage Specialist

Jeff, I think it's now time to get the "Death Trap" for that little rat bastard! I myself had a horrible night's sleep. We are watching our friend phsyco dog and he barks & huffs at everytjhing. Since my son is home from South Bend this weekend and my daughter was out late last night, I only got woken up about 6 times with stupid barking. And I mean LOUD!. Now I need to run and get ready to go to the Bears game today. Tailgate City at noon with the game at 3:15.

Nov 24, 2007 11:02 PM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

Keith Sorry to hear about the dog and Da Bears. Sorry I have season tickets to the Green Bay Packers. You guys really need a win today,

J.

Nov 24, 2007 11:09 PM

Gary L. Waters Broker Associate, Bucci Realty

Bucci Realty, Inc. - Melbourne, FL

Eighteen Years Experience in Brevard County

Nice chart. This really does go a long way in telling the real story.

Nov 24, 2007 11:44 PM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

Gary I really like this chart as well.

J.

Nov 24, 2007 11:49 PM

Irina Netchaev

Pasadena Views Real Estate Team, Inc. - Pasadena, CA

Pasadena CA Real Estate

Jeff, thanks for the link to the article. I always track absorption rates and discuss with sellers prior to setting the price. It's interesting looking at your numbers that our markets are quite reversed. Properties over a million are moving quite quickly here in the Pasadena and San Marino area of CA. The ones between $500K and $750K are sitting on the market much longer. Enjoy your Sunday!

Nov 25, 2007 01:47 AM

Irina Netchaev

Pasadena Views Real Estate Team, Inc. - Pasadena, CA

Pasadena CA Real Estate

BTW Jeff, it must have taken you forever to break down your numbers by price range. You are amazing!!! Great job!

Nov 25, 2007 01:54 AM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

Chris Hopefully people in Austin will see what is going on.

Nov 25, 2007 03:07 AM

Irina Netchaev

Pasadena Views Real Estate Team, Inc. - Pasadena, CA

Pasadena CA Real Estate

Jeff, that's great that the title rep helps you with these numbers. I run them myself, but it takes a long time to break it down by price and area. Thanks for the feedback!

Nov 25, 2007 03:11 AM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

Irina Get you Title Co. to help. It wouldn't just help you tell them. They could give it to all their clients.

Win Win,

J

Nov 25, 2007 03:13 AM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

Craig I really like to show this to my clients and explain it to them.

Nov 25, 2007 03:14 AM

Gary J. Rocks

Juba Team Realty - Jefferson Township, NJ

Jeff

Thanks for posting that information, it will help me to better be able to explain it when on a listing appointment.

Nov 25, 2007 04:49 AM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

Gary R. No problem. I always like helping fellow Realtors.

J.

Nov 25, 2007 04:54 AM

The Trumm Team Omaha Homes for Sale, Real Estate

Keller Williams Greater Omaha - Omaha, NE

I also do absorption rates by price range. Check out Absorption Rate by Price Range.

Troy Trumm

Dec 19, 2007 11:10 AM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

Troy. I will check it out thanks.

J..

Dec 19, 2007 11:18 AM

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