One of my favorite things about real estate is meeting with prospective home sellers. I love to sit down with them and explain how home prices are determined and how I can help them sell their home quickly and for top dollar. I almost always hear the question from the home owner, "How fast will my home sell?" There are many factors that go into answering this question to be able to give an honest answer.
One of the biggest factors in answering How Fast Your Home Will Sell is the absorption rate. Let me explain what the absorption rate is.
The absorption rate provides the answer to this question: How many months it would take to sell all the homes for sale in my area at the current rate they are selling? The higher the number, the more aggressive home sellers will have to be to get their home noticed and sold.
This figure is very easy to determine on your own. You only need to know two things – the total number of active listings (homes currently for sale) and the total number of homes that sold over a specific period of time. If you can determine the number of sales in your area in the last 6 months, divide the total sales by 6 to arrive at the average number of sales per month.
To get your magic number, divide the total number of active listings by the average number of sales per month and you get the absorption rate: an estimate measured in months of how long it would take to sell off the current inventory of listings, if all conditions remained the same. Remember, this number looks only at current inventory – it does not take into consideration any additional homes that will come on the market in the future.
Below you will find the most current absorption report for single family homes in Utah County. This is a general report and not specific to city or style of home. If you would like a specific absorption report for your home and area please feel free to contact me at Derrick@DerrickTornow.com. Don't forget to provide your name, address and square footage of home.
| 2 Months | 3 Months | 4 Months | 5 Months | 6 Months | 12 Months | |
|---|---|---|---|---|---|---|
| Active Properties: | 2,848 | 2,848 | 2,848 | 2,848 | 2,848 | 2,848 |
| Under Contract Properties: | 834 | 834 | 834 | 834 | 834 | 834 |
| Sold Properties: | 701 | 1,038 | 1,345 | 1,591 | 1,884 | 3,840 |
| Market Absorption: | 767.50 Per Month | 624.00 Per Month | 544.75 Per Month | 485.00 Per Month | 453.00 Per Month | 389.50 Per Month |
| Inventory: | 3.71 Months | 4.56 Months | 5.23 Months | 5.87 Months | 6.29 Months |
