What is So Important about Absorption Rate?

Absorption rate tells you how fast a property will likely take to sell based upon the rate of recent sales of comparable properties. The absorption rate of similar sales provides important information to sellers and buyers alike.

The math is simple. First, identify similar properties that sold during the past year within similar neighborhoods or condominium projects and within a specific price range. Next, look back 12 months to find out how many similar properties sold. Now divide 365 days by the number of sales; this will give you the rate of sales for this sample group (for instance, one sale every 37 days on average). Finally, multiply the number of active comparable listings by the rate of sales to determine how long it should take for the current inventory of comparable properties to be purchased by buyers or absorbed into the marketplace.

WHAT DOES ABSORPTION RATE TELL SELLERS?

When a property owner evaluates selling his or her property they are usually given data on comparable sales in order to determine the fair market value for their property. If an absorption analysis is provided, the seller can see how long it should take to sell their property if no additional similar properties come on the market. Based upon the unique circumstances of the property owner, he or she can plan on how long it should take to sell the property in the current market.

If an owner is selling the property due to a job transfer that will occur within the next 45 days, the absorption rate will help the seller price his or her property to sell within a specific time period, assuming it is listed at a reasonable price.

WHAT DOES ABSORPTION RATE TELL BUYERS?

Absorption rates are important to buyers because they provide buyers with an estimate of how long it will take a property to sell that he or she may be interested in purchasing. If properties are selling quickly in a neighborhood or condominium project, or the supply of homes or condos for sale is very limited, the buyer knows that he or she should act quickly in submitting an offer in order to arrive at an acceptable price with the seller.

On the other hand, if there is a large supply of properties for sale, a buyer does not have to act as quickly to put together a deal. The buyer may be able to negotiate a lower price from a seller if the condominium project or neighborhood has had fewer sales. The information that a buyer derives from an absorption rate analysis can tell that buyer if he or she should act quickly and pay near or at the seller's list price, or start with a lower price offer to get a better deal in markets with fewer sales.

Contact me at 1-800-585-0151 or Ron@TheWilsteinTeam.com with all of your Park City and Deer Valley real estate needs.

-Ron

Ron Wilstein, TWT Broker and Leader

THE WILSTEIN TEAMwww.TheWilsteinTeam.comKeller Williams Park City Real Estate1750 Sun Peak DrivePark City, Utah 84098

435-487-0151 or 1-800-535-0151 (office)
435-487-9416 (fax)

Five Important Steps to Buy the Property You Want

Today's buyer is challenged with trying to purchase a property in a limited inventory marketplace. You don't want to pay too much, but you also don't want to offer too little and miss out as another buyer pays a little more and walks away with the property you wanted. These five important steps will guide you through the process so you get the property you want. 

1. SHOP ON-LINE OR IN PERSON

94% of all buyers begin their search for Park City properties on the Internet. You can get a lot of information online and more buyers than ever are comfortable purchasing a property without ever seeing it in person. Most however, do walk the property before writing an offer on it. The important thing is to not only look for the right property but pay attention to all the properties you browsed, as they will help you determine a fair price to pay for the one you want to own. 

2. COMPARABLE MARKET ANALYSIS

Once you find the property you want to buy you'll want to determine a fair price for it. We help our buyer clients decide the correct price for a property by providing them with information on comparable properties sold within the past six months. We also take into account the remaining inventory of similar properties for sale as they represent competition that sellers need to consider as they evaluate the offers we present for our clients.  

3. ABSORPTION RATE

Knowing how fast similar properties take to sell will help buyers determine the correct negotiation strategy to use along with the correct offer price. Ask me about my recent article, "What's So Important About Absorption Rate?"

4. EVALUATE THE INVENTORY OF ACCEPTABLE PROPERTY CHOICES

When shopping for a property keep track of how many properties overall meet your criteria and, of course, which ones make your short list of selections that you would consider buying. There may be a handful of acceptable properties that work for you, or only one. If there is only one property for you, you'll want to offer the seller a price very close to or at the list price. 

On the other hand, if there are several good properties acceptable to you, you can offer the seller a lower price. A seller in that situation is competing against other properties. If they're not willing to meet you at your price, some other seller may and they'll miss out on the sale.  

5. DAYS ON THE MARKET 

Finally, consider the length of time a property has been on the market. This may tell you something about the property owner's disposition toward selling. If a property has been on the market for a long time (longer than the average time to sell similar properties) this may signal that the seller is not very motivated to sell the property. If the owner has not reduced the list price over an extended period of time it suggests that he/she is willing to wait for a buyer to come along who will pay his or her desired price.

On the other hand, if the owner has reduced the list price numerous times it suggests that he or she wants the property sold soon. If a property has only been on the market a limited time (less than a month), the owner will probably not come off the list price very much upon receiving an offer. Of course, if the property is competitively priced it will likely sell quickly to the first buyer who steps up and pays the owner's price.

SPECIAL "BUYER ALERT" WEBINAR

We have prepared a special webinar to explain these five steps in greater detail and the psychology behind each. It is entitled Five Important Steps to Buy a Park City Property at the Right Price.

Contact me at 1-800-585-0151 or Ron@TheWilsteinTeam.com with all of your Park City and Deer Valley real estate needs.

-Ron

Ron Wilstein, TWT Broker and Leader
THE WILSTEIN TEAM
www.TheWilsteinTeam.com
Keller Williams Park City Real Estate
1750 Sun Peak Drive
Park City, Utah 84098
435-487-0151 or 1-800-535-0151 (office)
435-487-9416 (fax)

Park City is the "Best Town Ever"

Those of us who reside in Park City already know it is the best town to live in, but it's nice to have Outside Magazine declare it to be so from among all other small towns across the United States. The September issue of Outside Magazine named Park City as the "Best Town in America."  Outside said, "Park City feels like a Colorado ski town dropped into Utah's 12,000-foot Wasatch Range, with one significant difference. Unlike Telluride or Aspen, it has a major city, Salt Lake, and an international airport 30 minutes away."

The article pointed out that Parkites (Park City residents) have easy access to three world-class ski areas, along with climbing, hiking, and camping in 500,000 acres of wilderness in the nearby Uinta Mountains, 370-plus miles of trails, a blue-ribbon trout stream (the Provo River), and an Olympic training center built for the 2002 Salt Lake Games. More than 100 Olympians live in Park City. "There is no better blend of small-town friendliness, absurdly easy access, and five-star culture than Park City," said Outside Magazine.

SKI Magazine Readers Agree: They Love Park City's Resorts 

SKI Magazine announced in their October issue the results of it's annual Reader's Choice that ranks North America's ski resorts in a variety of categories, from snow and grooming to off-hill activities. All three of Park City's resorts placed in the top 10. Deer Valley is No. 2, Park City Mountain Resort is No. 5 and Canyons is No. 10. Last year was the first in which Deer Valley, PCMR and Canyons all finished in the top 10 overall in the West.

Deer Valley placed first overall in several categories including grooming, service, on-mountain food, lodging and family programs. Park City Mountain Resort was first overall in three categories: access, off-hill activities, and terrain parks. It was also second overall in family programs.

Canyons wrapped up the tenth spot, joining this top ten list for two years in a row. The addition of Vail Resorts operating Canyons will further support its position among the top resorts in the country.

With three Top Ten ski resorts all in one town, Park City enjoys unparalleled access to the best in outdoor mountain recreation.

If you would like to talk to me about your Park City or Deer Valley real estate investment, please call my office at 800-535-0151 or email me (Ron@TheWilsteinTeam.com).

-RonRon Wilstein, TWT Team Leader and BrokerTHE WILSTEIN TEAMwww.TheWilsteinTeam.com 
Keller Williams Park City Real Estate1750 Sun Peak DrivePark City, Utah 84098
435-487-0151 or 1-800-535-0151 (office)435-487-9416 (fax)