How fast will my house sell? – The Real Estate Market.

Posted at 1:35 PM, Jan. 20, 2006

When you are selling your house, most people are thinking about how fast the house will sell. There is no simple answer; the answer is it depends. It depends on the condition of the home, it depends on the price, it depends on the location, and it depends on the economy and the Real Estate Market. The condition can be changed by making improvements to the home or the sales price can be adjusted. Price or discreet landscaping can also minimize the impact of location. We will discuss condition, location, and the impact on price later.

The Real Estate Market and price of homes vary from town to town. Prices can be relatively high or low. There are many things that contribute to this, some are real, and some are just perception. However, the general market or salability of a home in a specific town can be measured with present and historical Real Estate records.

In understanding the Real Estate Market and using the Crystal Ball to do some economic forecasting we will be using a tool called the Rate of Absorption. The Rate of Absorption is very simply the number of homes for sale divided by the average number of homes sold per month. The answer gives us the months of supply of homes for sale. Keep in mind that this is only a snapshot of a market trend. As the number increases, the market is moving to a buyers market. As the number decreases, the market is moving to a sellers market.

I took four of the towns we service to give you an example of the calculation.

Moorestown: There were 305 homes sold in 2005. As of today, there are 128 homes for sale. The Rate of Absorption for Moorestown is 5.0.

Cinnaminson: There were 163 homes sold in 2005. As of today, there are 51 homes for sale. The Rate of Absorption for Cinnaminson is 3.7.

Medford: There were 378 homes sold in 2005. As of today, there are 119 homes for sale. The Rate of Absorption for Medford is 3.8.

Cherry Hill: There were 1,192 homes sold in 2005. As of today, there are 311 homes for sale. The Rate of Absorption for Cherry Hill is 3.13.

These are Absorption Rates for all price ranges in a single town. You will find that if the Rate is personalized for a narrow price range those Absorption Rates will differ.

For a personalized analysis of your market, give the HouseJeanie Team a call.

Bart Erickson

Housing Market to Normalize in 2006

Posted at 9:41 PM, Jan. 11, 2006

In the last three weeks we have been showing clients about 40 houses in the $300K to $400K range. By the second day of showings, it occurred to us that most of the homes were vacant; in fact in the end only 3 homes were occupied. Of the three homes, an elderly woman who was moving to a nursing home the next day, occupied one, the other two were occupied and the families were looking for other homes with another REALTOR®. Of the rest of the homes, 1/3 were a divorce situation (Only the clothes of a woman or a man and some furniture were in the house.), 1/3 were sold but back on the market because the deal fell through, and the rest had moved into new or resale homes. The reason I bring this up is that RISMedia's Daily e-News (A free real estate news service presented by RISMedia, publisher of Real Estate magazine. RISMedia, Inc.) published an article today entitled Housing Market to Normalize in 2006

Housing Market to Normalize in 2006
NAR economist: cooling sales are necessary for the long-term health of market
RISMEDIA, Jan. 11 The key word for the housing market in 2006 is balance, with a return to a more normal rate of price growth, according to the National Association of Realtors®.

This experience of ours is just a small example that the market is adjusting or moving from the hot sellers market through a transition period before becoming a buyers market. You have probably heard a lot about the bubble and that it is about to burst. It's not going to happen. Prices will just not have the sharp rise that has been occurring in the last few years. We will see a leveling of prices with some price reductions in homes that have been deliberately overpriced in anticipation of catching a higher price in a rising sellers market.

In addition we have seen homes lingering on the market for longer periods of time. Sellers and their REALTORS® will have to pay greater attention to their local market and price their homes accordingly. Sellers would be well advised to consider close offers very carefully, you may not have an opportunity of a sale at that price again.

Bart Erickson

Member of the HouseJeanie Team