I decided to take Mirela Monte's advice from her post entitled: How Posting Easy Market Statistics For Your Area Can Garner You Valuable Leads .
The key statistic that I calculated is the absorption rate, the time it would take to sell the current total inventory at the present rate of sales. For my calculations, I determined the present rate of sales based on data retrieved for 4 different periods (latest 12 months, 6 months, 3 months and one month sales). Most would only look at the last month's sales to get the present rate of sales, but by looking at the 4 chosen different periods, we get a better sense of the trend in recent sales and the trend in the absorption rate.
If you want to learn more about the absorption rate and its importance, please read Amber Noble-Garland's post entitled: Market Absorption 101 - A basic lesson in Real Estate .
I ran queries on the Red Lodge MLS, tabulated the numbers in a spreadsheet and came up with my first statistics to post on AR. The following summarizes my results:
City: Red Lodge
Type: Residential
Date: December 31, 2008
Total inventory: 90
|
Period (Data Observed) |
Number of Units Sold |
Equivalent Yearly Sales Projection |
Absorption Rate * |
|
Last 12 months |
55 |
55 |
1 year 8 months |
|
Last 6 months |
29 |
58 |
1 year 7 months |
|
Last 3 months |
8 |
32 |
2 years 10 months |
|
Last month |
2 |
24 |
3 years 9 months |
* Explanation: Based on the total inventory as of December 31, 2008 and a rate of sales similar to the number of units sold in period indicated (last year, 6 months, quarter or month), it would take the indicated time (in years and months indicated under Absorption Rate column) to sell the total inventory. For example, based on the inventory as of December 31, 2008, and a rate of sales similar to the number of units sold in the last year, it would take 1 year and 8 months to deplete the total inventory.
I will provide these statistics (for residential and for vacant land) on a monthly basis to help clients and future prospects get a better understanding of the market in Red Lodge.
I also have the absorption rate statistics broken down by price range for Residential and by acreage for Vacant Land. Feel free to contact me if you are interested to get an estimate (based on the inventory and the latest trends) of how long it would take before all the current inventory of properties in a specific price range in Red Lodge is sold.
Gerry Khatchikian, ASA, TRC (4 languages spoken: English, French, Spanish, Armenian)
Realtor Associate
ASA: Associate of the Society of Actuaries TRC: Transnational Referral Certification
All photos and/or written content produced by Gerry Khatchikian. All rights reserved and may not be reproduced or reprinted without express written permission of Gerry Khatchikian, Realtor Associate.
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