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