When looking at my Absorption Rate Report, you may be totally dazed and confused (or it could put you right to sleep). Let me attempt to present some method to my madness.
Breaking the total inventory down into price ranges makes it handy to for a buyer, seller, builder or developer to see a snapshot (at the moment of the report) of the activity happening in their price range of interest. Buyers will be more familiar with how to present their offer. Sellers can decide how realistic they need to be when pricing their property for sale. Developers and builders will see if their planned product is actually selling and at what rate, telling them if they should move forward with their plans or put them on hold.
Column by column definitions:
Active Listings: The number of listings on the market, INCLUDING pendings (under contract), actives with backups requested and Kickouts. If they are not closed, they are active.
Pendings: The number of active listings which are under contract, INCLUDING pendings (under contract), actives with backups requested and Kickouts.
Pending Ratio: The % of active listings that are under contract.
6 Month Expired: The number of listings that have expired in the past 6 months. This means they have been rejected by the market, usually due to being overpriced. Of these, some may be back on market.
6 Month Closings: The number of properties that have closed in the particular price range in the past 6 months.
Avg Sales Price: Average sales price of the closed properties that were listed and priced in a particular price range.
Absorption Rate: The number of months it would take for the present active inventory to sell based on the past 6 months’ sales, averaged monthly.
Diff: The difference (in months) of absorption between the present report and the previous report. A positive number is “bad” and a negative number is “good”. This number, just as the absorption number, may be more than meets the eye. It could be a negative # (good), but could be due to less inventory (like expireds at the end of the year) and NOT due to an increase in sales, which is still good, but deceiving.
List/Sale %: The average sales price to list price ratio. The sales price is usually less than the list price. This ratio does NOT take into account any price reductions, but the list price at the time of the sale.
Hopefully this will help explain my reports and make it less intimidating. As always, unless you buy and sell several properties a year, I recommend using an experienced professional when buying or selling real estate. Only then is one truly familiar with a particular market.
Go HERE to see my most recent reports.
Blessings
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- Maximum Home Value Analysis (CMA) This week I taught a class in our Keller Williams Realty office dealing with pricing–specifically how to find the right market price for a home. Within the real estate community this process is often called a CMA which may stand for Comparative Market Analysis or Competitive Market Analysis. If you are not familiar with the lingo
- Rea Estate Bountiful Utah monthly report for November 2009 Sold properties in Bountiful Utah homes for sale as of the moment reach around 70 number of homes with an absorption rate of 7.39 months. November 2009 number of homes sold was around 30. As a result, there’s an annual increase of 16.67% in home sales because of last year’s home sales of only around 25. Bountiful
- Positive Real Estate Market Trend – Decreasing Inventory Levels You want to hear some good news? No problem. Real estate market inventory levels (also known as absorption rates) have decreased approximately 50% for counties in and around the Fox Valley during the last half of 2009. Simply put, inventory levels are the number of months it would take for the homes currently for sale to be
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