Anyone who follows our local Real Estate market certainly know that we are in a Sellers’ market. Any Realtor is also well aware of this but just how extreme are our current circumstances? . . . EXTREME!
According to data available from the Greater Lansing Association of Realtors, our current Absorption Rate is at an ALL TIME low, or at least as far back as available records go. Experienced Realtors keep an eye on this important statistic that measures how quickly homes are selling but what exactly is the Absorption Rate.
Investopedia.com gives a nice definition of this:
The term absorption rate refers to a metric used in the real estate market to evaluate the rate at which available homes are sold in a specific market during a given time period. It is calculated by dividing the number of homes sold in the allotted time period by the total number of available homes. This equation can also be reversed to identify the amount of time it would take for the supply to be sold.
When I became a Realtor 10 years ago, we were told that a “normal” absorption rate is around 6.0, meaning that if no new homes came on the market all current homes listed would be sold in 6 months given the current rate that homes are selling.
At the end of March, 2021 the absorption rate was .84 meaning that if no new homes come on the market all current homes listed would be sold in LESS THAN A MONTH. Of course this is just a statistic and measures activity over time but the trend is clear, homes are being sold at a record pace and this is a great time to sell a home.
Of course the reverse side of this good news for sellers means challenges for buyers and is why it is so important to work closely with an experienced Realtor who can help you successfully purchase a home in the very competitive market we are in.
Whether you are Buying or Selling soon or even within a year from now, give me a call and lets develop a strategy to help you be successful in this market. “My goal is Achieving Yours!”