Why Sellers Must Understand Changes in the Sharon MA Real Estate Market
At the end of February 2013, I reported that we had a Sellers' Market in Sharon MA with an overall absorption rate of 2.5 months. Now, we are almost at the end of April and the overall absorption rate has changed to 5 months. What's happened to cause that change?
Absorption Rate is defined as the amount of time it will take to sell the current inventory of homes if no new listings come on the market. We can talk about the overall absorption rate for a particular real estate market, ie: Sharon. However, it's critical for homeowners who are thinking of selling their home to understand the absorption rate for their specific price range.
Here is a chart that shows the Absorption Rate and the Rate of Home Sales in Sharon MA since January 1, 2013.
Most of these price ranges are experiencing a Seller's Market. That is, there is more demand that inventory. You can see that in the price ranges where the Absorption Rate is less than 5 months. In fact, homes that are priced appropriately in the $300K and $400K price range have been receiving multiple offers the first day they are on the market. You can see that one home is sold every 10 to 14 days, respectively, in these price ranges.
When the Absorption Rate reaches 5 to 6 months it is usually considered a "balanced market". The amount of inventory is about equal to the demand for these homes.
Once the Absorption Rate is over 6 months, it becomes a Buyer's Market. This means there is more inventory than there is demand for houses in this price range. Since there is less competition, buyers can take longer to look at all the homes available in the price range and compare their features and upgrades carefully before making a decision.
In the chart above, I have highlighted in red the prices ranges that reflect a Buyer's Market. Since February, we've had a significant jump in the number of homes listed for sale in Sharon MA in the $300K, $600K and $800K price ranges. The homes in the $600K and $800K ranges are selling at a slower rate. This has increased the combined Absorption Rate when we look at all the price ranges together.
If you are selling a home in one of these price ranges, it is even more important that your house is priced correctly to sell. You'll want to make sure that your home stands out from the competition and that buyers can easily find out about your house through their internet search.
Look at the 3 homes currently for sale in Sharon MA that are priced between $800,000 and $899,000. One home in this price range is sold every 111 days. That means that if your house is not priced correctly for what it offers, your home may be the house that is sold after 222 or even 333 days on the market. Remember, the longer a home sits on the market the lower its sale price.
The good news is that the average sales price has increased by 4% since the end of February. How do you find out what the correct price is for your home? Call Nina Rogoff at 781-883-3764 for a complimentary market analysis of your home. If you have questions about Absorption Rate, please call or email me at firstname.lastname@example.org.