Raleigh NC Real Estate - Is It A Buyers Market or a Sellers Market?

By
Real Estate Broker/Owner with RED Properties NC #129285
https://activerain.com/droplet/SQC

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 Absorption Ratelocal 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.

Absorption RateThere 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. 

Don't forget, you can always search for ALL the homes for sale in Raleigh NC and the surrounding area at RaleighRed.com.  

Posted by
 RED Properties RaleighRed
RED Properties RaleighRed

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Show All Comments
Rainmaker
739,690
Ed & Tracy Oliva
West USA Realty - Arizona - Fountain Hills, AZ
The Oliva Team Arizona Agents
This is some good Info for all in your area, keep up the good work and good luck with your business in 2013, E
Mar 29, 2013 08:01 AM #1
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Thanks for stopping by Ed & Tracy!  It's always nice to see new faces.

Mar 29, 2013 08:07 AM #2
Rainmaker
1,166,284
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Amazing that you are just now moving into a sellers' market.  We have had an extreme one for a while.  But you are correct, the home still needs to be priced correctly.

Mar 29, 2013 09:28 AM #3
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

We were behind the country going into the bubble and we are behind coming out.  Whew - what a ride though, huh?

Mar 29, 2013 10:35 AM #4
Rainmaker
2,559,757
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Ah yes, the ole absorption rate.  Boy has it become a little scizophrenic from a year ago:-)

Mar 29, 2013 12:36 PM #5
Rainmaker
1,317,551
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

It is important for sellers to understand that while many markets are transitioning, the rise in values is still "stable" in most areas and therefore, properties must appraise...   I think this statement is accurate

"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. "

Mar 29, 2013 01:21 PM #6
Rainmaker
1,570,174
David Saks
(retired) - Memphis, TN

Good reminders. Thanks for posting and sharing some valuable information.

Mar 29, 2013 05:29 PM #7
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

It has been crazy watching it so up and down, Myrl!  I hope activity is solid in your area and you are doing well!

Mar 29, 2013 08:49 PM #8
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Are values have started to rise, Joan, but oh so cautiously!  Thanks for stopping by and I hope you have been well!

Mar 29, 2013 08:51 PM #9
Rainmaker
3,137,612
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Leesa... a great explanation! This absorption rate is a hard issue for many home buyers and sellers to really understand. Of course, part of the problem is that many agents don't really understand how it works, themselves (so how can they explain it?). And you're right, regardless of whether it's a buyer's or seller's market, you still have to price your house correctly.

Mar 29, 2013 10:20 PM #10
Rainer
227,787
Athina Boukas
Virginia Capital Realty - Richmond, VA
Certified Residential Specialist (CRS)

This is a good explanation with the important warning to sellers to not get too excited and overprice.  Appraisers are still looking at past market data.  Even if a buyer offers "above" recent past sales, an appraiser may not agree.

Mar 29, 2013 11:17 PM #11
Rainmaker
1,379,417
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Leesa, a Sellers Market is not an indicator that sellers can ask whatever they want for their property. You are right, it still has to be priced right.

Mar 29, 2013 11:48 PM #12
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Hey there, David - LONG time no see!  I hope you have been well and thanks so much for stopping by!

Mar 30, 2013 02:14 AM #13
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Thanks so much Nina for stopping by!  That's funny - I have asked other agents and some of them have a deer in the headlights look.  If you are going to use the statistic - back it up!

Mar 30, 2013 02:18 AM #14
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Oh so true, Athina!  Caution on pricing is STILL priority!  Thanks for stopping by!

Mar 30, 2013 11:15 PM #15
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Thanks for stopping by, Michael!  And, yes, common sense and a strong reasonable price is always recommended regardless of sellers market or buyers market.

Apr 03, 2013 11:48 PM #16
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Rainmaker
635,293

Leesa Finley

RED Properties - Raleigh NC Real Estate
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