When navigating the real estate market, two critical metrics that can help you make informed decisions are Days on Market (DOM) and Absorption Rate. Understanding these metrics can provide valuable insights into both individual property performance and broader market trends.
What is Days on Market (DOM)? Days on Market refers to the total number of days a home has been listed for sale by a particular agent. This metric starts counting from the day the property goes live on the market until the day it is marked as sold or removed from the listings. Importance:
For Sellers: A lower DOM often indicates high demand and can justify a competitive asking price. Conversely, a higher DOM may suggest the property is overpriced or in less demand, prompting the need for adjustments in pricing or marketing strategies.
For Buyers: A property with a high DOM might signal an opportunity for negotiation, while a low DOM could indicate the need for quick decision-making to avoid losing out to other buyers.
Factors Impacting DOM:
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Pricing strategy
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Property condition
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Location
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Market demand
What is Absorption Rate? Absorption Rate represents the rate at which available homes in a specific market are sold over a given period, typically expressed as a percentage. It is calculated by dividing the number of homes sold during the period by the total number of available homes in the market. Importance:
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High Absorption Rate (>20%) usually signifies a seller's market where homes sell quickly.
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Low Absorption Rate (<15%) often indicates a buyer's market where homes sell more slowly.
Factors Impacting Absorption Rate:
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Overall market demand and supply
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Economic conditions
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Interest rates
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Seasonal trends
Comparing DOM and Absorption Rate
While DOM offers insights into the performance of individual properties, Absorption Rate provides a broader view of the market's health. Together, these metrics can significantly enhance decision-making for sellers.
Pricing Strategy:
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High Absorption Rate & Low DOM: Justifies competitive pricing due to high demand.
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Low Absorption Rate & High DOM: Suggests a need for more aggressive pricing and marketing tactics.
Current Day Stats
July 27, 2024
Grand County Board of Realtors, MLS Reports
Year to Date Activity Report (ALL Single Family Res, Grand Lake Area):
Active Listings: 53
Sold Listings: 24
The absorption rate is 0.45
Approx. Days to Sell Home: 806 days or 26.53 months
If inventory becomes higher, it will take longer, and vice versa if the inventory levels taper off.
Year Over Year Comparison (ALL Single Family Res, Grand Lake Area):
Active Listings: 143
Sold Listings: 49
The absorption rate is 0.34
Approx. Days to Sell Home: 1065 days or 35.17 months
If inventory becomes higher, it will take longer, and vice versa if the inventory levels taper off.
Price Range Specific Analysis (Price Range $1,200,000 to $2,500,000, Single Family Res, Grand Lake Area)
Active Inventory: 14 homes
Sold Listings: 9 homes
The absorption rate is 0.64
Approx. Days to Sell Home: 568 days or 18.73 months.
If inventory becomes higher, it will take longer, and vice versa if the inventory levels taper off.
Price Range Specific Analysis (Price Range $1,200,000 to $1,800,000, Single Family Res, Grand Lake Area)
Active Inventory: 16 homes
Sold Listings: 6 homes
Monthly Absorption Rate: 0.38
Approx. Days to Sell Home: 973 days or 31.97 months
If inventory becomes higher, it will take longer, and vice versa if the inventory levels taper off.
Seasonal Markets
Understanding the ebb and flow of the real estate market in Grand Lake is crucial for both buyers and sellers. Grand Lake, known for its seasonality, experiences the highest number of closed transactions from May to September. During these warmer months, the market becomes particularly active, driven by the influx of buyers eager to secure their dream homes in this picturesque location.
For sellers, this period represents an optimal time to list properties, as increased buyer activity can lead to more showings than in the off months. Conversely, buyers may find a wider selection of available
homes during these months.
