Real estate is very local. When you hear how the real estate market is performing overall it is usually on a statewide or national level. We recently learned that in the state of Maine single family sales have increased by 17% from this time last year, that’s a big jump. It doesn’t necessarily mean that your town or county performed in the same manner.
Cumberland County happened to perform in line with the overall state numbers and if you combine condo and single family home sales, the increase from this time last year is about 14%. There were a total of 4,099 single family home sales in all of Cumberland County since October 2014, ranging from a bank owned property for $16,000 in Casco to a $7,150,000 retreat in the town of Raymond.
Despite the wide range, the average single family home list price was $317,495 and sale price, $307,971. The good news for home sellers is the sales/list price ratio was 97.46% and average days on market for a 3 bedroom home, just 75 days.
This brings us to the absorption rate. Calculating the absorption rate (how many homes sell in a month) will tell you how many months it may take to sell your home, here’s how you calculate it:
Determine how many homes sold within the past 12 months
Divide the amount of sold inventory by 12 months and that will tell you the absorption rate
Factor in the amount of active listings on the market
Finally, divide the number of active listings by the monthly absorption rate and that will determine the number of months it will take to absorb all of the listed property currently for sale.
Let’s calculate the current absorption rate for Portland, Maine. There were 583 single family homes sales this past year. We divide 583 by 12 and get 48.5 homes selling per month. There are currently 191 single family homes listed for sale, divide that number by the absorption rate of 48.5 and we get 4.2 months.
This is how long it should take to sell through all of the available inventory, based on current statistics.
If you would like to know the absorption rate for your town please feel free to contact me directly on 914.406.9023 or MyMaineAgent@gmail.com
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