May 05, 2011

Selling a house in Walworth County? Let’s talk about Absorption Rates!

Posted to Debbie Cobian

Selling your house in today’s market is a challenge that is sometimes difficult to understand. Agents often prepare market analysis’ to determine if there have been sales of “comparable” homes in your neighborhood in the past three to six months.

Another method to determine how fast homes are selling is to determine the supply and demand which is also referred to as the ‘absorption rate.’ The absorption rate basically determines how many months it would take to sell the current inventory of homes based on the average number of sales in that area.

For example, if there are 100 homes for sale in a five mile radius of your house and over the past six months there have been an average of five sales per month, that equates to 20 months of inventory in your neighborhood, provided all the conditions stay the same. We can also estimate that of those 100 homes, only 30 of them are expected to sell in the next six months.

Typical home sellers would like to move within three to four months of putting their home on the market so the general interpretation of the absorption rate numbers are as follows:

• Sellers Market: 1 to 4 months supply of homes
• Neutral Market: 5 to 6 months supply of homes
• Buyer’s Market: More than 6 months supply

I did analyze the absorption rate for all of the Walworth County homes for sale. The Absorption Rates for the current inventory of single family homes was 20.87 months and for condominiums it was 32.63 months. Yes, it’s definitely still a buyer’s market and once you know the actual numbers for your neighborhood, it’s important to position your home to be competitive for the current market conditions in your neighborhood.

If you’d like to know the absorption rate for your neighborhood, give me a call at 262-949-9818 or email me at

Posted by:  Debbie Cobian

Tagged With: absorption rates, current housing market, current inventory of homes, debbie cobian, housing market 2011, living in lake geneva, living in walworth county, real estate advice, real estate market and real estate trends