One of the most important bits of information to know when listing your house is absorption rate. Absorption rate reveals when all the homes on a market will sell, provided no other homes are added to the market. It is used to determine when a market will "sell out" of inventory. By knowing the absorption rate in your area while your home is listed will help you determine pricing, marketing, and other valuable information to make your home the most appealing and most likely to get a sale. It will also give the seller the most likely scenario as far as time-frame to sell.
To determine Absorption Rates:
1. # of listings currently on the market = x
2. # of listings that sold last month = y
3. y times 12 months = # sold per year
4. # sold per year divided by 52 weeks = # sold per week
5. x divided by # sold per week = absorption rate per week
In general, a seller's market results when the answer to #5 above is as low as possible. Conversely, a buyer's market exists when the absorption rates are high.
If you are about to list your home or your home is listed, ask your Realtor to tell you what the absorption rate is in your neighborhood.
For more information, send me an e-mail. I am always happy to help. Connie@BozemanMontanaProperties.com
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