Is it a buyer's market in Knoxville, Tennessee?

One of the best ways to calculate a trend in Knoxville housing sales is the absorption rate for that area.

The absorption rates for a huge area such as Knoxville or Knox County is a pretty meaningless number. To forecast current trends more accurately you need to target into a smaller area such as a specific area, subdivision, or zip code.

And, since most sellers and buyers are interested in the price point their particular Knoxville house fits into, limiting it to that price point makes this tool even more useful.

As an example let’s take the price point from $375,000 to $425,000 in the Town of Farragut, a popular suburb in the west end of Knox County.

According the the Knoxville Area Association of Realtors Multiple Listing Service (MLS) figures, there have been 32 houses sold & closed to date in the above price range in Farragut.

There are currently 44 homes for sale in Farragut in that price point. To calculate Farraguts absorption rate for that price point we first divide the number of months used, 10 in this case, into the number of sales, 32. The answer is an average of 3.2 homes sold per month.

Next you divide the sold homes average, 3.2 into the number for sale from the MLS, 44 and the answer is 13,75 which means there is currently a 13.75 months supply of homes for sale in Farragut (assuming no new listings come on the market).

That makes Farragut right now a very strong buyers market.

Read the rest of this article at:Knoxville Tennessee Real Estate Blog, Oct 2008

You should read the whole article. You can also find lots of great buying & selling tips at KnoxvilleHomeCenter.com