BayWatch Magazine – Property Values | January 1, 2019
There are only a certain number of homes that will sell in any given period of time, in any given market, in any given price range. What are the odds that my home will be one of them?
If I want to sell my home I have to “look at the comps”, as it is said. What are comparable properties selling for and what else is for sale? If the comps support my asking price, that is great. But let’s say I live in a condo or subdivision where on average 5 homes sell each year and there are presently 10 for sale. If in the next year 5 of these homes sell but mine is not one of them, how much has my adherence to these “comps” helped my situation?
Welcome to “Absorption Rate” pricing. An absorption rate is the rate at which a market is moving homes. And to use this in pricing your home is to ensure that you will be one of the successful Sellers this season.
Of the 163 homes that have come on the market in Bonita Bay over the last 180 days, 85 have sold, but then that means the other 78 have not sold. Not many Sellers expect their home to go unsold within the first 6 months of coming on the market, but these numbers show there is almost a 50% chance that this will be the case. Further, of all properties that have sold in Bonita Bay in the last 365 days, these averaged 114 days on the market prior to securing a Buyer. And the properties that have not sold, those are averaging 189 days on the market….and counting. This is somewhat sobering for a Seller.
Bonita Bay is presently a Buyer’s market – there are more Sellers than Buyers. While there are variations between types of properties, there is currently more than a 7-month supply of inventory, and this takes the urgency out of the marketplace. There are presently 147 available or pending resale properties (excluding Seaglass and Omega) in Bonita Bay. By contrast, three years ago at this time this number was a low 102. Yet today is not as slow as 2010 when this figure was 227. To those of you who purchased in 2010, you’re looking good right now!
So why do Buyers tend to sit on the sideline when inventory is up and sales are slower? And then why do people get frenzied and urgent to buy when inventory is low and sales are brisk? It’s funny when we hear from a shopper or another broker who says, “We really like your listing that we just looked at, so let us know if anyone else makes an offer,” and we say “Why, are you hoping to enter into a bidding war?….No?…. Then make an offer now and let’s do a deal today.”
So to the Buyers, now is the time to buy. It is a Buyer’s market. This will eventually change, it invariably does, but no one knows when. Don’t wait for a bidding war, make your move today. We’ll share the good news with the Sellers, we’ll let them know you’re on the way.
Gary L. Jaarda & Jeff Jaarda
John R. Wood Properties
(239) 293-1507 | firstname.lastname@example.org