What Does Absorption Rate Mean To A Seller?

There is a constant throwing around of terms among Realtors that the average Joe does not know or understand. one term is absorption ate and what ti means to them as a seller.

So what is absorption rate. Absorption rate by definition is the ability of the real estate market to absorb or sell all of the houses for sale in a given amount of time in a specific area. For example, you live in providence plantation and let's say there are an average of 10 homes sold in that subdivision each month. That means on average that subdivision sells 120 homes a year. if there are 120 homes on the market at one time then it would take an average of 12 months for your house to sell. That number changes month to month as well as some homes go on the market and others go off the market.

So, I am selling my house why is this important. The absorption rate will let you know that if you are looking to sell your house and price it at fair market value in providence plantation (for example) that it would take up to one year on average to sell your house based on the current trends.

What a lot of sellers fail to understand when they put their house on the market is the average time it will take to sell a home in that neighborhood. Now, you can increase your odds of getting your house sold and also decrease your odds of getting your house sold based on how you price it in comparison to others in the neighborhood.

If you know the absorption rate and say i do not want to wait a year..you can lower your price to a more competitive price in comparison to the other homes to attract an offer sooner than later.

If yo are not in a hurry and rather wait to get fair market value for your home you can price it for fair market value and know it could take up to a year or longer to sell your home.

Absorption rates are great when you are thinking of selling a home and a vital piece of information needed to make a decision that is best suited for your needs.

Dave diCecco
Realtor/Broker
www.davedicecco.com