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Absorption Rates: one of the Top Five Things a South Lake Tahoe Home Seller Needs to Know

February 16th, 2012 categories: Absorption Rates, For Buyers, For Sellers, Lake Tahoe Real Estate, Major Market Reports, South Lake Tahoe Statistics, South Lake Tahoe, CA, Stateline, NV

Helping the South Lake Tahoe, CA Home Seller sell their house (pt 1)

One of the things we do is provide as much information as we possibly can to help a South Lake Tahoe, CA home seller sell their house. To be successful at that, there is much a seller needs to know, comprehend and ultimately accept. This is part one in a five-part series to help all home sellers.

In general, and this is the bottom line, a seller needs to price their house properly to sell it successfully. To do that, one has to be informed, or fully market aware. It is market awareness that helps prevent a home seller's biggest mistake: listing their house too high.

When a home seller lists their house too high, it costs them time and money. This series will detail exactly how much time and how much money listing too high costs.

A summary of all of the Top Five things a Seller needs to know is found below.

Absorption Rates :
This post is a focus on the first of the top five things a home seller needs to know. Absorption Rates is a look at market demand. It identifies a seller's competition, tracks the number of competitive sales per month and pinpoints how long it will take to sell the current inventory in a seller's price-range.

For this detailed look on Absorption Rates, we will use the median sold South Lake Tahoe, CA house as an example.

As of right now, the median South Lake Tahoe, CA house is $225,000. This is based on all single family home sales in the last 180-days. Here, the Tahoe Keys is not included. Throughout the last year, home sales in this particularly unique neighborhood skew the median sold price upward by almost 10%.

In the last 365-days 89 South Lake Tahoe, CA homes have sold between $200,000 and $250,000. This is a monthly absorption rate of 7.42 home sales in this price range per month.

Looking at the last 180-days of housing demand in this price range, 48 single family homes sold, which is an absorption rate of 8 sales per month.

At present there are 32 listings on the market in this price range. Lets refer to these listings as the "inventory." It will take about 4 months to sell all of these listings at the current monthly absorption rate.

It should be noted that an inventory of less than six months is considered a Seller's market. More than that is an advantage to the buyer.

Thinking like a Home Seller :
Based on this information, here are some thoughts a home seller might consider to sell a home in this price range.

1. There are 32 homes listed that are the seller's competition. Almost 8 of them are selling a month.

2. A seller might want to look closely at these 32 homes, either in person, or at least by reviewing all of them on a detail listing sheet.

3. The seller should be as honest as possible about this: of these 32 homes, if I were a home buyer, which one would I buy first? Which 8 do I think will sell first?

4. The seller now considers their house compared to the competition. Is it the first house you would buy? Is it in the middle of the pack? Is it the worst of the lot?

5. Absorption Rates gives a seller the means to better price their house to sell it within their time frame. An honest assessment of other similar houses for sale, coupled with an understanding of how many homes sell in a month is key to that.

Summary of the top five things a home seller needs to be aware of are:

1. Absorption Rates
This informs a seller about market demand; it identifies a seller's competition, tracks the number of competitive sales a month and pinpoints how long it will take to sell the current inventory in a seller's price-range.

2. Characteristics by Price
This informs a seller about current home prices by examining the key characteristics of a house over time.

3. Characteristics by Size
This helps a seller develop a listing strategy by examining key characteristics of a house based on comparative size.

4. The Odds of Selling
This helps a home seller fully understand their odds of achieving success over time.

5. The Effect of Listing Too High
This exactly identifies what it costs a home seller to list their house too high, both in terms of time and money. The results are both stunning… and a great savings for the South Lake Tahoe, CA homeowner.

Posts in this Top Five Things a Seller Needs to Know series:

Feb 24, 2012: (Pt 5) The Effect of Listing Too High: one of the Top Five Things a South Lake Tahoe Home Seller Needs to Know
Feb 21, 2012: (Pt 4) The Odds of Selling: one of the Top Five Things a South Lake Tahoe Home Seller Needs to Know
Feb 20, 2012: (Pt 3) Characteristics by Size: one the Top Five Things a South Lake Tahoe Home Seller Needs to Know
Feb 18, 2012: (Pt 2) Characteristics by Price: one of the Top Five Things a South Lake Tahoe Home Seller Needs to Know
Feb 14, 2012: Intro: The Top Five Things a South Lake Tahoe Home Seller Needs to Know

Some Lake Tahoe Real Estate Blog posts about Absorption Rates and overall market information:

CA major market reports: