by Terry Brown
"Absorption Rate" is a term used in the Real Estate industry to reflect the amount of property listed for sale vs how many will likely sell in the future - with the math coming from previous sales in a certain market. In other words, "the rate of properties that will be absorbed in the market in future months = absorption rate"...
As of today, the absorption rate for Residential homes within Salida is 8.5 per month, or 8.5 homes are selling on average every month within Salida. Since today there are 97 residential homes listed on the MLS, that means the inventory of residential homes for sale is 11.4 months - obviously a Buyers market. NOTE: These figures do not include Residential Homes with Acreage or any other locations within our MLS area. However, that number has came down since August when the inventory was at 14.1 months. This is good that the inventory is falling, however, a healthy market is a 6 month supply. More than 6 months is a Buyers market, less than 6 months is a Sellers market.
Many homes listed today are priced (or in our business we call "positioned") in the market too high, and it will take nearly all 11.4 months before they will sell, if they sell at all. If a home is "positioned" too high, then they are considered "out" of the market. We don't create the market, Buyers & Sellers do - we just analyze it.
Unfortunately, there are Brokers out there who will list a property at any price the Seller desires, even if it is the wrong price. They will tell you what you want to hear just to get your listing. We often call these Brokers "Listing Queens". They will let someone else sell the property, they just want the listing so they can have a piece of the action if it ever sells...
What Sellers do not understand is that many Buyers will look at your property only ONCE, and if the price drops - they ignore it. Many times Buyers will look at your property online or on the MLS and nix it without even walking inside if it is "positioned" incorrectly. If you have a home listed and there hasn't been any showings from other Brokerage firms, this is what is happening. However, many Brokerage firms will make their own Brokers show your home to Buyers who are not interested in your home, but they want to be able to show they have shown your home... They call this parade a "comparable showing" - they show your property to "compare" it to others, although they are not interested in it...
Throwing your property up for sale at a price not correctly positioned for the current market could make it remain for sale for many, many months longer than it should, and in a Buyers market, the selling price usually ends up being LOWER than if it was positioned correctly in the beginning. If you NEED to sell your home, price it correctly from the beginning. Most homes sell within 95% of the asking price - IF they sell. Those priced 10-20% or higher vs their today's value, usually won't even get an offer. Make sure you understand what your Broker "should" know...
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