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Market Watch April, 2009

by Pamela J. Windom, p.c.

Things are picking up! Now that word is getting out about the availability of low mortgage interest rates and the $8,000 tax credit available to first time home buyers, buyers are beginning to get back into the swing of things and are out looking for deals. The increase in sales activity caused the number of month’s worth of available sales inventory to drop from a high of 20.6 months in January to 9.7 months in March.

We are definitely feeling the effects as more and more shortsale and foreclosed properties enter the market place.  Often times these are distressed properties and when combined with the fact that banks do not like to hold real estate inventory, these properties get priced to sell and help drive down prices in the market overall.  It is going to take some time for these properties to cycle through the system, for available inventory to drop and the market to balance out.  Sellers who desire to sell are forced to compete with these “priced to sell” properties in the open market.  If you are considering selling your mantra must be …..more for the same or the same for less.  We are definitely in a buyer’s market!

The good news in all of this is that if you are a first time buyer or are looking to sell and move up, the time is now!  If you need to sell before you purchase, you may take a bit of a hit on the selling end of things, but can definitely make up for it on your purchase.  Think of it as a percentage game…..a 10% loss on a $200,000 sale is $20,0000, while a 10% gain on a $350,000 purchase is $35,000. 

If you are ready to enter the real estate market, give me a call.  I will be happy to help you sort out the details as they relate to your specific circumstances.  Every person has their own real estate story.  Let me help you put a positive spin on yours!  It’s time to create your happily ever after.  Call me….541-431-6498.

Absorption Rate...What is it? & Why it pays to be in the know.....

by Pamela J. Windom, p.c.

Real Estate lingo tends to be baffling at times, but understanding the meaning behind the terminology can be of great benefit.  From time to time, I will address different terminology that is not only beneficial to know, but also understand, so you can put it to good use in formulating a plan for the sale of your home. 

Today's Term.....Absorption Rate

Absorption Rate is the length of time it would take to sell the inventory of a given area at the current sales rate.  It is a valuable tool for use in determining a price range for marketing a home for sale. To calculate the current absorption rate, simply take the number of homes that are currently on the market and divide that figure by the number of homes that sold last month……this will equal the absorption rate.

As you prepare to list your home for sale, knowing the current market activity is a must.  I assume that you aren't placing your home on the market just for fun and that you actually do desire/need to sell your home.  Being practical from the "get go", will often save you time and money in the long run.  In a market where prices are declining, being in front of the pack is important.   (This means being competitively priced, so people not only notice your home, but are attracted to it, because it is a good deal.) Bear in mind, a good deal, doesn't mean a fire sale on your end.  If you are priced right from the beginning and your home sells quickly, isn't that better than sitting on the market for 6 months, trying to sell your home, only to watch the market values decline and getting less for your home than you would have if you had priced it ahead of the market to begin with?  Bottom line…..it is better to have the market chase you, instead of chasing the market down.   

 

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