Many times when I create the monthly market reports I reference the Absorption Rate. On listing appointments I mention the Absorption Rate and even use it to assist me with my Competitive Market Analysis. An Absorption Rate is a great indicator of what is happening in a 
local real estate market.
An Absorption Rate quite simply is the supply of homes that are on the market. For instance, if there is an Absorption Rate of 8 is would mean that should NO other homes be listed it would take 8 months for the currently listed homes to sell or to be "absorbed" back into the market.
Typically, a balanced market has an Absorption Rate of 6. That means that it is neither a Sellers Market nor a Buyers Market. When you see the Absorption Rate go above 6 then you have entered into a Buyers Market (more homes on the market) and conversely when you see an Absorption Rate dip below a 6 the you are in a Sellers Market (less homes on the market).
A buyer's market means that there are more homes on the market which then in turn means more variety and most likely lower prices due to the competition among the listings.
A seller's market means that there are less homes on the market which then means that prices are most likely higher because there is now a demand for properties.
There have been some wide swings in the Absorption Rate and it would seem that the pendulum has now swung into a Sellers Market. In the Raleigh NC area we are seeing an Absorption Rate of 4.9. (February 2013) This same time period in 2012 had an Absorption Rate of 7.4. What was considered a Buyers Market in 2012 has now turned into a Sellers Market. While the numbers may indicate a Sellers Market that in no way gives carte blanche to sellers in wanting to price high, etc. The local Raleigh resl estate market is still fragile and, while indicators point to strengthening, we must all be careful to recognize our buyers ability to purchase. The mortgage guidelines have changed as well over the last few years so the process and time between contract to close is somewhat daunting to navigate.
While we may be considering this a Sellers Market, I can not emphasize enough; the most critical thing a home seller can do if they are putting their home on the market is to PRICE IT CORRECTLY. If you want your home SOLD the key elements are STILL pricing competitively, top shape both inside and out and flexibility.
If you are considering selling your home I would be happy to review the current real estate trends in your immediate area. With a proper pre-marketing meeting I can devise a plan that will get your home SOLD! Selling your home is a huge endeavor and it takes a professional that understands the local real estate market and its nuances as well as someone that is a fierce negotiator. As your REALTOR I will guide your through this process and represent YOUR best interests!
If you are considering buying a home please call me! Real Estate Buyers simply MUST have an advocate on their side. As your Buyers Agent I can help you find the home that not only meets your expectations but exceeds them! There are many homes to choose from in all shapes, sizes and price ranges. Don't let it overwhelm you - ask for help! I would be happy to meet with you and discuss your needs and wants as well as work with your Mortgage Lender to be sure we are maximizing your buyiing power to get you the most home for your money.
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